As sustainability regulations continue to grow, Moderna’s legal team is leveraging generative AI to stay ahead of the changes. Shannon Thyme Klinger, the chief legal officer at the US biotechnology company, explains that generative AI allows them to summarize vast amounts of information from different law firms, identify consistencies and inconsistencies, and pinpoint any gaps.
However, legal leaders are not only relying on technology to stay updated; they are also playing a strategic role in shaping the sustainability agenda. Lyndon Arnall, the group general counsel at Australian mining group BHP, states that in-house teams now have a seat at the table for business decisions related to sustainability.
Despite this increased responsibility, in-house lawyers face challenges like reconciling the trade-offs between financial and sustainability goals. According to a 2022 survey by professional services firm EY, 95% of law departments find this challenge to be difficult. Additionally, 99% of respondents anticipate an increase in their workload due to environmental and social concerns.
Technological advancements and ESG requirements are already keeping in-house lawyers busy. Maria Varsellona, the chief legal officer at Unilever, emphasizes the constant evolution of regulations, rulings, technologies, policies, and procedures. With these changes, legal teams across jurisdictions encounter the challenge of dealing with varying rules. For example, the approach to combating modern slavery differs between the US and the UK.
Another important aspect for legal teams is mitigating ESG risks. This includes ensuring that the company’s public statements on emissions reduction align with its actual performance and avoiding “greenwashing.” Scott Offer, the general counsel at Flex, advises that substantiating statements with data is crucial to avoid greenwashing. Furthermore, legal leaders can provide an objective perspective on the risks associated with greenwashing.
In addition to risk mitigation and compliance management, lawyers can act as strategic advisers on sustainability targets. They can offer guidance on investment decisions and contribute valuable insights during board meetings. Collaboration with other departments is essential in this role. For example, Klinger mentions the importance of working with teams in manufacturing, research and development, and health and safety at Moderna.
Davies from EY points out that many in-house legal teams still view sustainability solely through the lens of compliance. To overcome this narrow perspective, businesses often appoint sustainability champions or create dedicated ESG departments. However, the goal should be to integrate sustainability into every aspect of legal work. This requires a shift in mindset and automatic consideration of sustainability risk and value in all legal processes.
In response to the growing ESG workload, in-house teams are strengthening their resources. BHP, for example, has legal teams specializing in climate change, indigenous community engagement, and diversity and inclusion. The 2022 EY survey reveals that organizations are taking different approaches to handle the increased workload, including hiring new staff, leveraging technology, and utilizing external legal advisers and alternative legal service providers.
In summary, in-house legal teams are utilizing generative AI, playing strategic roles in sustainability decision-making, and adapting their resources to address the evolving legal landscape. The key to success lies in integrating sustainability into all legal processes and considering sustainability risk and value as a fundamental aspect of legal work.
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