Communicating sustainability without ticking off lawyers or regulators

Quick Connects are brief but beneficial conversations Mike Hower conducts with leaders in sustainability and ESG about a variety of sustainability communication topics. Watch the conversation or read the transcript below.

Sustainability communication has never been under more scrutiny. With increased risks from expensive civil litigation and hefty regulatory fines for getting it wrong, many companies are resorting to greenhushing. But with employees, customers, policymakers and other stakeholders demanding sustainability information, companies also can’t afford to remain silent.

To better understand how companies can manage legal risks with their sustainability communication, I recently connected with Christine Uri, an independent ESG and in-house legal advisor, who I call “The Sustainability Lawyer.

Mike Hower: Hey, everybody. I'm here with Christine Uri, an independent ESG in house legal advisor. We’re mainly here today because, as a sustainability communications guy, I'm very, very concerned with how things are changing on the regulatory front and litigation front when it comes to communicating sustainability.

Christine, thanks for chatting with me today. And we had a few questions to dive a little deeper into — the legal risk companies face and talking about sustainability and ESG and how they can overcome them. And then also, any advice you'd have to sustainability communicators like myself on how we can navigate this space without having to go back to law school.

What are the biggest legal risks companies face when communicating sustainability?  

Christine Uri: There's really two sides to the spectrum right now on legal risk and sustainability communications. One side is what you're seeing grab the headlines, the greenwashing claims. So companies who go out and make bold sustainability statements may then have consumers come back and say, “Hey, you did not communicate that to me correctly,” or “I misunderstood you and seek a class action.” 

So you have that kind of litigation issue. Then on the other side, you know, the newly emerging area is in regulations. So you're having sustainability regulations like the CSRD in Europe and then, California just passed its own climate disclosure regulations. On the other side, you'll have regulators requiring disclosures and if companies aren't disclosing what they should be, they will be fined.

So you have to find that middle ground. 

Mike: What advice would you give companies that are hoping to avoid these risks when it comes to communicating sustainability? 

I think on communicating sustainability, this is going to be a hot area. There's a certain amount of risk that is just inherent in it, like there is in any part of the business.

What companies are finding more successful right now is a couple things. One is, you know, really be very thoughtful about using any kind of label. So if you're just labeling something, something like where this comes up a lot is in your climate target. If you're saying your net zero, or you're saying your carbon neutral, first of all, make sure you understand what that term means because it is rather complicated.

Make sure that you can verify that you meet the requirements for that term and then, really communicate about it transparently and realize that by doing that you're still accepting some risk related to it.  

Mike: Right. And as I mentioned, I'm a sustainability communicator. I do have a poli sci degree, but I don't have a law degree.

Sometimes I feel a little concerned about the current landscape and, you know, how can, how can sustainability communicators — if they're in-house or advising clients — how can they navigate this new era of increased scrutiny, without going back to law school?

Christine: I actually come at things from the other end. I'm always trying to convince in-house counsel and legal counsel in general that they have to learn sustainability terminology. So if a general counsel should be reviewing what claims are being made by the company and if they see that there's a particular, you know, “ethically-sourced” or some kind of a term in there, they should be able to know what that means and ask some questions about it for a sustainability communications consultant. I'm not sure you'll like this answer, but you should be partnering with the legal counsel and making sure that they  get their eyes on what you're seeing, and hopefully it can be a positive partnership where you have a chance.

You don't have to go to law school. You can have the legal team do that, but the legal team, for its part, needs to come back and say: “Hey, I understand that the company needs to and wants to communicate on this somehow — and my job is to enable that. How can we work together to make sure this communication has a good balance of both benefit and risk?” 

Mike: How would somebody partner with you to mitigate these risks? You're an independent, kind of “ESG lawyer,” which there aren't many of those out there. How would a company work with you or how you maybe can talk about how you were currently working with companies to help them on this?

Christine: I currently work primarily with general counsels and what I do is help figure out how to set up their in-house legal program related to sustainability — and then also do board and executive education around what areas they need to be aware of how they're setting up ESG programs as they're setting these targets.

So certainly I'd advise the general counsel to have their communications person be a part of these trainings to have them be engaged. But what I do is I help general counsels figure out how to navigate these waters currently.  

Mike: Thanks, Christine.