US law firms are increasingly leaning on their associates to help shape their environmental, social and governance (ESG) and diversity strategies, according to a new report from Thomson Reuters.

The ‘Talent & ESG Top Concerns as Firms Find New Ways of Working’ report found that firms are coming under pressure from associates to create a clear statement on their values and priorities and how that will be implemented. The report also found that associates will sometimes turn down job offers if a firm doesn’t have a clearly defined purpose.

Natalie Runyon, an analyst at the Thomson Reuters Institute said: “Associates are increasingly making their voices heard on the subject of how their employer approaches ESG. Savvy leaders within law firms are leveraging this passion and expertise by engaging younger generation lawyers on how to best embody ESG values.”

She added: “It’s not enough to simply set ESG targets – firms need to ensure that these are reflected in decisions made daily. For the younger generation of legal talent, having a strong sense of purpose is of crucial importance to them. Firms that want to attract the brightest and best talent need to give this proper consideration.”

Some firms are using their junior lawyers to create dedicated teams of ESG experts, with these ‘millennial boards’ tasked with advising leadership on ESG matters.

This comes as corporate clients increasingly focus on the ESG credentials of their vendors, including law firms, as companies themselves are held to higher sustainability standards by regulators, shareholders and their customers. At the same time, law firms are also reviewing their own client lists and evaluating their exposure to potential reputational risk.

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Firms are also focusing more on how to measure diversity and inclusion. Some US firms are separating out diversity initiatives to focus on priority areas such as race or gender.

Companies are increasingly expecting their panel firms to provide diverse client teams. The report found that this can create challenges if corporates and law firms have different definitions of diversity. For instance, some US corporates are demanding the involvement of Hispanic lawyers in their client teams. For globally-facing US corporates doing business in Asia, say, that can be a challenge because that demographic is not widely represented in Asia Pacific. This example highlights the need for greater dialogue around diversity, equity and inclusion expectations.

A survey published last month by Hogan Lovells found that global multinational companies are struggling to integrate ESG risk into their compliance programmes. As many as 82% of compliance officers are concerned that ESG is not embedded in existing risk practices, while 57% reported a lack of company-wide engagement with ESG issues.