Beyond Compliance: How 3 GCs are helping drive sustainability and deliver business benefits

The regulatory tidal wave surging toward businesses in the form of increasing environmental, social, and governance (ESG) compliance requirements is leading many corporate General Counsel (GCs) to wonder how they will keep their head above water, especially with their already overflowing in-box.

The experience of three legal leaders from FedEx, Centrica, and FirstGroup demonstrate that GCs can handle these compliance challenges and indeed, can go beyond them to help drive their organization’s sustainability and in doing so deliver tangible business benefits.

Over the last two years, the Thomson Reuters Institute has been highlighting how the role of the GC is expanding beyond managing legal risks to consider wider geopolitical risks. These inquiries demonstrated that GCs are teaching their organizations how to build trust and handle enterprise-level risks, particularly regarding ethics and ESG issues.

With my unique perspective as CEO and founder of General Counsel Sustainability Forum (GCS Forum), I have a front row seat to see how GCs are rapidly adapting to the demands being placed on them and their organizations. In fact, I’ve worked with all three of these GCs and it’s been a privilege to see how they are working with their internal colleagues to help deliver on their businesses’ goals and targets.

FedEx: From horizon scanning to sustainable business impact

Roel Staes, senior vice-president and GC of international operations at FedEx, leveraged his expertise in risk and horizon scanning to think and act proactively on his organization’s goal to achieve carbon neutrality across its operations by 2040.

Through his initial participation in the GCS Forum, Staes recognized that GCs, with the support of their team, are very well placed to build a robust sustainability strategy and governance process. This led to the region’s president asking Staes to design and lead the process to craft a road map for each of the next 16 years that would enable FedEx Europe to deliver on both its interim milestones and 2040 commitment.

Roel’s steps to create the roadmap included ensuring initiatives were developed with key performance indicators (KPIs) and grouped around clusters to cover the full scope of the company’s carbon footprint along with the creation of bespoke business cases for each initiative to meet their KPIs. His contributions led to sustainability being added to his job description, and in addition to his work as General Counsel for Europe, Staes is now responsible for the territory achieving carbon neutrality by 2040.

Centrica: Leading policy change with company stakeholders

Raj Roy, Group General Counsel and Company Secretary at Centrica, a leading energy services company, took action to advocate for changing aspects of the UK’s energy transition regulatory system through engaging with company stakeholders and earning their support.

Roy realized early in his membership in the GCS Forum that he could apply his experience and skills along with his internal network and external connections to the energy transition, and thus helping make a difference. Specifically, Roy identified an opportunity to press for an important change to the regulatory framework and worked with a range of Centrica’s external stakeholders, including investors with an interest in the development of future policy.

This activity contributed to a change in the framework that in turn enables an acceleration of the deployment of renewable and low-carbon infrastructure and flexible assets, along with tangible benefits for energy consumers. Roy’s efforts illuminate how GCs can take an insight and support the delivery of tangible results.

FirstGroup: Engaging the supply chain with ESG contract clauses

Christy Baker, General Counsel at FirstGroup, a leading private sector provider of public transport, helped chart a path for achieving the company’s sustainability commitments with its suppliers. Inserting sustainability clauses into contracts is an obvious and a popular initiative to start off with for lawyers with a commitment to sustainability; however, Baker quickly realized that it wasn’t as easy as it appeared on the surface, and progress initially stalled.

To jumpstart the process and achieve optimum outcomes, Baker recognized that a tailored approach was required which accelerated adoption of company’s new ESG clauses in its contracts. In fact, by FY2024/2025, FirstGroup expects to award up to 400 contracts, valued at up to £500 million, that will be incorporating these clauses.

Based on his experience, Baker advises using this four-step approach:

1. 1. 1. Identify your objectives — This stage is key, and FirstGroup’s objectives were to develop and implement clauses into standard procurement templates and provide the company with measurable outcomes as well as qualitative reassurance.
      2. Bridge silos internally — Reaching out to internal counterparts, such as procurement, revealed similar conversations were happening. The legal function under Baker’s leadership led the formation of an integrated working group to initiate and drive the project forward.
      3. Draft and refine “good” clauses — Adopting the principle of getting to good quickly, rather than perfect slowly, Baker and his team worked with a panel firm to develop nine bespoke clauses covering various areas from emissions data reporting to energy and water use and diversity and inclusion pledges.
      4. Implement the rollout — To accelerate the rollout, FirstGroup decided to initially implement the clauses in new and extended supplier contracts after training the procurement team.

GCs going beyond compliance

By leveraging their leadership roles and legal expertise, along with their enterprise-wide perspective, Staes, Roy, and Baker illustrate how GCs are uniquely positioned to help embed sustainability into their organizations’ core business operations. And these examples from FedEx, Centrica, and FirstGroup demonstrate further how GCs are taking proactive leadership roles in driving their companies’ sustainability strategies, delivering business benefits, and achieving meaningful impact.

As the world continues to grapple with challenges such as climate disruption and biodiversity loss, the contributions of GCs like these — who go beyond their role in regulatory compliance — are instrumental in creating a more sustainable and responsible business landscape.