Paul Watchman

Special Legal Adviser at UNEP Principles of Sustainable Development Net Zero Insurance Underwriters Alliance

Leading Legal Authority on ESG

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Paul Watchman is a leading figure and recognised legal authority in areas connected with ESG (environmental, social and governance). Through a long association with the UN, he closely scrutinises law firms and their developing ESG practices.

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We talk about the widespread greenwashing by Big Law, how large law firms really see their ESG practices as recruitment tools and promote it in glossy material and through webinars and their websites, but in large part fail to walk the walk on diversity, wellbeing, sustainability and transparency.

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Bio

Show notes

Links

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Bio:

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Paul Watchman is a recognised legal authority in areas connected with ESG. He is formerly a partner of magic circle firm Freshfields.

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He was named by Ethical Corporation with Hank Paulson, former United States Secretary of the Treasury, as one of the six most influential global figures in the development of sustainable finance and has been awarded the Thomson Reuters Environmental, Social and Governance (ESG) Leadership Award for Outstanding Contribution to the Development of ESG (Environment Social and Governance) in 2010.

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He is a leading figure in the development of policy, business and financial practice, national and international legal norms and voluntary codes and standards and a recognised authority and thought leader in areas such as business and human rights, sustainable finance, corporate responsibility, and climate change law.

 

He has a long association with the United Nations and the Principles of Responsible Investment.  He has acted as Legal Counsel and Special Advisor to the United Nations Environment Programme Financial Initiative (UNEPFI) on a number of projects. This includes being the principal author of a report on fiduciary duties which was an influential report credited with revolutionising market practice on the legality of integrating ESG considerations into the investment decision-making by pension funds and other investment houses.

 

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Show notes:

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• [2:05] Paul shares his background as a lawyer in Glasgow acting for the homeless and victims of domestic violence, before he turned to academia and eventually became a Partner at Magic Circle law firm Freshfields.

• [5:45] Paul says the levels of greenwashing he has found in scrutinising Big Law firms is substantial, having reviewed the ESG practices claimed by 55 international law firms.

• [7:06] As a Big Law insider of many decades, Paul is well-equipped to judge what large law firms are promoting about their ESG credentials and what is actually true.  What he found was exaggeration of the scale and depth of ESG practices.

• [9:58] ESG specialism takes a commitment to learning, plus practical experience. The true number of ESG legal specialists is significantly smaller than what is claimed collectively by law firms. Genuine specialists would be known by the long-time practitioners in the area.

• [12:11] Paul expands on law firms using their ESG practices as a recruitment tool while their own records on diversity and wellbeing are dismal.

• [15:11] According to Paul, one of the biggest drivers of unhealthy culture in large law firms is the billable hour model which reduces lawyers to resources and puts young lawyers under tremendous pressure.

• [16:40] The billable hour model also mitigates against the specialism needed for ESG lawyers to develop, due to the investment in learning required which short-termism does not allow for.

• [19:39] Paul identifies specialist niche legal practices as one of the reasons for optimism in the development of authentic ESG legal practices. Niche practices can also choose clients who are aligned with their own values, which Big Law is not prepared to do.

• [23:43] Another point of pressure ought to come from general counsels and in-house legal counsels holding law firms accountable for diversity and inclusion in their workforce, including by demanding audits.

• [27:34] In Paul's direct experience, large law firms are extremely reluctant to provide statistics on gender diversity at the top of the tree in their structures, which is equity partnership.

• [30:03] We discuss how the real problem with Big Law and the ESG greenwash and hypocrisy is a fundamental lack of transparency.

• [35:31] I ask Paul for advice to young up-and-coming ESG lawyers and his extremely insightful message is to be courageous, be focussed, be imaginative and be mindful of how ESG is  changing structures and public expectations, such as applying public law standards to multinational corporations. ​

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Links:

 

Chasing the Dragon: The Rise of the ESG Law Firm, a coming report by The Blended Capital Group's ESG Law Advisory Team. led by Paul, exploring ESG developments across the global legal community. 

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The ground-breaking 2005 report, A Legal Framework for the Integration of Environmental, Social and Governance Issues into Institutional Investment, produced by Freshfields for the UN EP Finance Initiative   

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Jeff Twentyman, Corporate Partner at Slaughter & May

Georgia Dawson, Senior Partner at Freshfields

Aedamar Comiskey, Senior Partner at Linklaters

Charlie Jacobs, immediate past Senior Partner at Linklaters & now co-head of investment banking at JP Morgan

Oscar 

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John Ruggie, Berthold Beitz Research Professor in Human Rights and International Affairs at Harvard University, leading human rights expert and author of the UN Guiding Principles on Business and Human Rights

John Sherman III, General Counsel and Senior Advisor of Shift

The UN Guiding Principles on Business and Human Rights

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Alan Jope, CEO of Unilever

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Ben McQuhae, founder of Ben McQuhae & Co,  a specialist sustainability legal practice

Vanessa Havard-Williams, Global Head of Environment & Climate Change, Linklaters

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Lawyers for Net Zero, a coalition of in-house counsels delivering climate action

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Erin Lyon, V-P of Sustainability Consulting at ELEVATE

ERM, environmental consulting firm, issues media release on KKR acquiring a majority stake in it in May 2021,

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Law.com's 2020 equity partner survey

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A Guardian news report on Mishcon de Reya's proposed IPO.

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Slaughter & May's part-time work programmes .

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GE 2015 press article on its Ecomagination programme, a strategy to solve looming environmental and sustainability challenges in ways that make economic sense.

US EPA information on the Hudson river clean-up.

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The Australian Parliament's inquiry into Rio Tinto's destruction of sacred rock shelters at Juukan Gorge. 

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Sharma by her litigation representative Sister Marie Brigid Arthur v Minister for the Environment [2021] FCA 560, the landmark Australian Federal Court judgment finding the Federal Environment Minister owes a duty of care to children.

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The Royal Dutch Shell case, Milieudefensie et al. v. Royal Dutch Shell plc.

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An Independent news report of modern slavery investigation into UK fashion manufacturer Boohoo.

A Guardian news report on the Australian Fair Work Commission's finding of unfair dismissal against a Deliveroo driver.

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