Climate change: Law firms under scrutiny
Large UK law firms play an “indispensable role” in supporting the fossil fuel industry and law students need to hold them accountable for their impact on climate change, a new report has argued.
It said fossil fuel projects worth “a gargantuan £1.48 trillion” were facilitated by a group of 55 large London law firms between 2018 and 2022.
Law Students for Climate Accountability (LSCA) – a US group that has turned its attention to the UK – said this figure was more than two and a half times the £546bn in renewable energy transactions facilitated by the firms.
In its report The Carbon Circle, the UK Legal Industry’s Ties to Fossil Fuel Companies, LSCA encouraged students to ask firms about their fossil fuel work and client selection processes, and recommended that associates assigned to fossil fuel clients should request to opt out of that work.
It called on law firms to phase out existing fossil fuel work, decline to take new fossil fuel clients or work that seeks to expand fossil fuel infrastructure, and “avoid misrepresentation or greenwashing by ensuring communications on sustainability and climate change are not misleading”.
The report said the five UK-based ‘magic circle’ firms alone were responsible for over £285bn of work on fossil fuel transactions over the four years.
However, three US-based law firms with London offices led the transactional table – White & Case with £125bn, followed by Latham & Watkins and Vinson & Elkins.
Allen & Overy came fourth, with £89bm of fossil fuel transactions, while Herbert Smith Freehills, the next most active UK firm, came sixth, followed by Linklaters and Clifford Chance.
LSCA said Linklaters and Clifford Chance both ranked “squarely within the top 10 firms”, with transactions worth £74.9bn and £67bn respectively.
“However, the enormity of these figures is balanced out slightly by the fact that, amongst that same top 10, their track record in the realm of renewable energy is almost double the average and decidedly the highest amongst the group.”
While Freshfields’ £45.5bn in fossil fuel transactions did “not quite earn it a spot amongst the top 10”, the firm’s almost six-to-one ratio of fossil fuels to renewables was “by far the worst ratio among the magic circle firms”.
Turning to arbitration, LSCA based its calculations on the role of law firms in investor-state dispute settlement (ISDS) arbitrations involving fossil fuel companies between 2007 and 2022, picking out 165 cases involving the same group of 55 firms.
“ISDS has long been criticised for the ‘regulatory chill’ it can cause in states that seek to assert greater regulatory oversight over national resources,” the report explained.
Freshfields and US firm King & Spalding led the way, representing fossil fuel companies in 20 and 18 of these ISDS cases respectively (the next highest was six); Freshfields acted on the other side for state interests in five cases, with King & Spalding doing so only once.
Researchers said: “Law firms have adopted a very narrow understanding of sustainable legal practice, conveniently situating it within the bounds of relatively uncontested issues such as energy-efficient workplaces while ignoring the far-reaching effects of legal services on the climate.
“It’s time for lawyers to reckon with the broader implications of their work and be conscious that the cases that they take and the clients they represent more often than not exacerbate climate change.”
Camila Bustos, LSCA co-founder and report editor said: “The legal profession plays an indispensable role in supporting the fossil fuel industry, from arranging financing and writing contracts to ensuring corporations aren’t held accountable for harming communities.
“As we have worked to change the conversation in the US, we’ve also realised the extent to which these firms are global actors, and we’re excited to have found a group of students and legal professionals in the UK who are passionate about highlighting the role of lawyers in enabling climate destruction.”
Fatima Aziz, a law student at the University of Bristol, one of 11 who worked on the report, added: “The report makes clear that London’s legal industry is deeply entangled with fossil fuel companies. I shouldn’t have to endanger my own future in order to become a lawyer, and I hope to be part of forging a climate-just profession.”
LSCA published its first Law Firm Climate Change Scorecard, based on the largest 100 global law firms, in 2020. It named Allen & Overy and Clifford Chance as the worst global firms for fossil fuel transactional work in its 2021 report.
Soon after, students signed an LSCA pledge to boycott one US law firm it accused of “shielding corporate polluters from climate accountability”.
In March, a group called Lawyers Are Responsible published a Declaration of Conscience, in which lawyers pledged not to act for new fossil fuel projects or to prosecute members of campaign groups opposing new fossil fuel projects. This sparked a major debate on the cab-rank rule.
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