Charter Workstreams
Matters & mandates
The Matters and Mandates workstream has been exploring the most effective way to assess the current impact of client work in order to meet compliance requirements, client expectations, mitigate risk, exploit opportunities and reduce our impact on the natural world.
Firms involved in this workstream are: Bates Wells (chair), Clyde & Co, DLA Piper International, DWF, Gowling WLG, Mishcon de Reya, Pinsent Masons and Winston Taylor (formerly Taylor Wessing).
Workstream highlight:
The Matter Classifcation Toolkit
As we face the pressing challenge of climate change, it is imperative that the legal community steps up, both to assess and mitigate its own environmental impact, and to drive positive change more broadly. The Matter Classification Toolkit, and the tool within it, offer a simple methodology for law firms to classify matters according to their climate impact and contribution to the global climate transition.
Classifying matters using the tool is intended to generate useful data as to firms’ climate transition-aligned revenues and creates a qualitative metric allowing the proportion of, or revenues generated from, matters supporting, undermining or neutral to the climate transition to be determined, baselined, tracked and reported on over time.
The Matter Classification Toolkit has been designed to help explore how and when you might use the tool.
Having recognised the opportunity to support climate transition through our advice to clients, we are exploring how we might assess the current impact of our work with a view to developing and adopting an approach for the profession more widely.
We believe matters can be classified according to their contribution to transition and seek to balance the following objectives in agreeing a classification method:
- Credible, yet not requiring excessive time or resources to apply
- Capable of consistent application within firms and across the profession
- Focusing on climate initially, but scalable to other topics in future such as biodiversity and social impact
- Stable over time to allow trend analysis (e.g. transition-related income)
→ VIEW TOOLKIT
How it works
Matter classification is complementary to due diligence approaches taken by individual law firms in client onboarding and matter opening. Matters are simply classified in relation to their role in climate transition, as shown in the scheme below.
The tool can be used in a variety of ways:
- To manage climate-related risk
- To identify opportunities
- To increase engagement with stakeholders and manage stakeholder expectations
- To manage climate-related reporting, disclosures, and due diligence in response to regulations
- To set KPIs and targets and track progress against these
- To align with firms’ climate related commitments, targets and climate transition plans, and manage greenwashing risk
The tool
In relation to the matter, what kind of advice is it?
How to use the tool
To classify the matter with the appropriate classification tag, we suggest asking the following four questions in order. Please download the Matter Classification Toolkit for more detailed information and case studies.
Question 1
Does or will the matter enable Low Carbon Transition and/or Positive Climate Action?
Question 2
Does or will the matter have a minimal negative impact on climate, and it is correct that positive climate impact is not a primary focus of the matter?
Question 3
Does or may the matter have more than a minimal climate impact?
Question 4
Does the client have a published science-based net zero target which has been externally validated by the Science Based Targets Initiative (SBTi) [or equivalent standard]
ALIGNED
Matter enables Low Carbon Transition and/or Positive Climate Action.
Client is Paris-aligning.
TRANSITION
Matter enables Low Carbon Transition and/or Positive Climate Action.
Client is not Paris-aligning, or it cannot be determined if it is Paris-aligning.
NEUTRAL (ALIGNED)
Matter has minimal negative impact on climate, and positive climate impact is not a primary focus of the matter.
Client is Paris-aligning.
NEUTRAL
Matter has minimal negative impact on climate, and positive climate impact is not a primary focus of the matter.
Client is not Paris-aligning, or it cannot be determined if it is Paris-aligning.
NOT ENGAGED
Where the matter may have more than
a minimal negative impact on climate or
does not fall within the other categories.
Where we are
This is the first iteration of the Matter Classification Toolkit. It is intended that firms using the tool will report back to Legal Charter 1.5 with suggestions for improvement, identifying any difficulties or challenges that they have encountered while using the tool.
Feedback
Our intention is that we engage with users on a continuous improvement basis, to ensure the classification process is both rigorous and helpful. All pilot testing by firms of the tool and feedback will be treated in the strictest confidence.
If you would like to test the process internally and are prepared to share the results of your testing collaboratively with Legal Charter 1.5, please get in touch with director@legalcharter1point5.com.