Top 25 law firms year-end ESG performance review 2022
- impactvise measured the ESG performance of more than 1‘000 law firms (fig. 2).
- impactvise applies a proprietary scoring system that reflects the World Economic Forum’s (WEF) Stakeholder Capitalism Metrics for governance, planet, people, and prosperity.
- The chosen metrics are adapted to fit the legal sector.
Summary of findings
- As of year-end 2022, the ESG scores of the top 25 law firms range between 42-91 out of 100 (fig. 1).
- Almost 50% of the top 25 law firms are headquartered in the UK (fig. 2).
- The front runners are mostly UK magic circle firms followed by some big US law firms (six of top 25).
- Continental Europe hosts six top 25 law firms, one is based in Asia.
The WEF Stakeholder Capitalism Metrics are organized under four pillars that are aligned with the Sustainable Development Goals (SDGs) and principal ESG domains: Principles of Governance, Planet, People and Prosperity (fig. 3).
Summary of findings
- With an average score of 68 out of 100, the Top 25 law firms achieve best results in pillar “people”. The highest score in the pillar “people” achieved by the top 25 law firms is 100 and the lowest is 30 out of 100.
- Diversity, Equity and Inclusion (DEI) is part of the pillar “people” and DEI has been a long-standing focus of law firms. But there is still room for further improvement and law firms should continue focusing on DEI.
- But ESG is a more holistic view and challenges law firms in their organisation, behaviour and strategy.
- Clients expect from law firms not only ESG advise, but that they walk the ESG talk.
- The pillar “prosperity” provides the largest room for improvement with an average score of only 40 out of 100. The highest score in pillar “prosperity” achieved by the top 25 law firms is 100 and the lowest is 0 out of 100.
- “Prosperity”, as defined by the WEF Metrics, aims to build strong, transformative and inclusive economies for the long term. The most important topics of prosperity are employment and wealth generation, innovation of better products/services and community and social vitality.
Best practice examples
- impactvise has selected the best practice examples out of its data base covering more than 1’000 law firms (fig. 4).
- impactvise can provide its customers with best practice examples, advise them on establishing an ESG strategy and reporting on progress.
- Law firms are key players in the modern value chain have a unique position to support moving towards a more sustainable future.
- But many law firms have not yet started their ESG journey. But to be a credible ESG advisor, law firms will need to walk the ESG talk and demonstrate their license to operate to their clients.
Law firms have a long way to go
- impactvise compared the ESG performance of the top 25 law firms to professional service providers, such as PwC, EY, McKinsey or BCG.
- The average ESG scores (average for top 25 law firms: 54 out of 100 and average score for set of large professional service providers: 81 out of 100) show significant room for improvement, even for top 25 performing law firms.