Paul Weiss Rifkind Wharton & Garrison, a prominent law firm, has recently taken a significant step back from its environmental, social, and governance (ESG) initiatives. Once seen as a leader in this space, the firm launched an ESG advisory practice in 2020 and established the ESG and Law Institute a year later. These efforts aimed to help clients understand issues like climate disclosures and labor practices. However, in a surprising turn of events, the firm has removed its ESG advisory practice from its website and taken down the ESG and Law Institute’s website, which is no longer operational.
This change occurred last month, although it is unclear if it was related to a March executive order from former President Donald Trump. The order criticized Paul Weiss for its pro bono work against individuals involved in the January 6 Capitol riot and sought to restrict federal contractors from working with the firm. In response, Paul Weiss agreed to perform $40 million in pro bono work for causes favored by Trump, among other concessions. While the executive order did not mention ESG specifically, legal experts believe the firm’s withdrawal from ESG reflects a strategy to avoid further conflict with Trump and his supporters, who have been vocal critics of ESG principles.
Amelia Miazad, a law professor who was part of the ESG and Law Institute’s advisory board, expressed surprise at the firm’s quick retreat from ESG matters. She noted that the firm has not communicated with her about the closure of the institute’s website. This shift raises questions about whether other law firms will follow suit, especially as many have already altered their commitments to diversity and inclusion in response to similar pressures.
Despite Paul Weiss’s retreat, a review of over 40 major law firms shows that most have not made significant changes to their ESG practices. For example, Skadden, Arps, Slate, Meagher & Flom, which also settled with the Trump administration, continues to promote its ESG capabilities. Experts suggest that corporations are increasingly seeking legal guidance on ESG issues due to a rise in regulations. In the last decade, the number of new ESG regulations worldwide has surged by 155%, covering areas like greenhouse gas disclosures and supply chain transparency.
Adrian Walker, a partner at Hogan Lovells, emphasized that law firms must meet the growing demand for ESG expertise. He believes that clients want firms that can address these issues comprehensively. The political controversy surrounding ESG has intensified, with recent surveys indicating that many law firms have established ESG practices in the past few years. However, Republican senators have pressured firms to preserve documents related to ESG, framing it as an attempt to reshape society.
While Paul Weiss is not alone in scaling back its ESG focus, experts do not anticipate a widespread retreat among law firms. Walker noted that firms must adapt to client needs to remain relevant. As the landscape evolves, it will be interesting to see how other firms respond to the ongoing debates around ESG and its implications for the legal profession.