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We interview sustainability leaders across industries to learn what they are working on and how they are steering their companies toward a climate-friendly world.
Voiceover - 00:00:08:
Welcome to Open Source Sustainability. On this show, Alex Laster, CEO of Green Places, talks with sustainability leaders to learn how companies are adapting their business models to be in line with sustainability goals. We believe sustainability has to be open source to be successful. And these leaders have offered us a glimpse inside their strategies in the hopes that we can all move forward together. We are fascinated by some of the unique challenges these sustainability leaders face and are excited to dive deeper. In this episode, Alex is talking with Vidhya Prabhakaran, a partner at Davis Wright Tremaine, and Andrew Shaw, a partner at Dentons. They delve into the evolving landscape of environmental regulations and sustainability initiatives. And share their insights on how companies are adapting to new ESG requirements, the implications of regulatory changes. And the role of law firms in supporting these transitions.
Andrew Shaw - 00:01:01:
All right. Welcome to Open Source Sustainability Podcast. I'm Alex Lassiter, CEO of Green Places. I'm super excited. I've got two guests today from the legal industry, some specialists on environmental law and ESG. I've got Vid, partner from DWT, and Andrew, partner from Dentons. Welcome, guys. Thanks for coming.
Alex Lassiter - 00:01:22:
Thanks for having me.
Vid Prabhakaran - 00:01:22:
Yeah, thanks for having us.
Andrew Shaw - 00:01:25:
So I guess to kind of kick things off, maybe we do a quick round of introductions. Vid, why don't we start with you? Tell us a little bit about yourself. We'll get you into this space and then we'll pass it over to Andrew.
Alex Lassiter - 00:01:36:
Sounds good. So I'm Vid. I'm a partner at Davis Wright in the San Francisco office. I'm one of the co-chairs of our Energy, Natural Resources, and Environmental group at the firm. And so, you know, as a result of being in that capacity, A lot of the work that I do has really changed over time. It went from working for sort of traditional energy. Folks to uh companies and businesses across the spectrum who are now focused on their ESG priorities. And so. That's really what brought me into this space and talking to you.
Andrew Shaw - 00:02:14:
Awesome.
Vid Prabhakaran - 00:02:17:
Andrew, Sean, at Denton, and thanks again for the opportunity to be here. My practice is focused on helping a variety of energy clients similar to Vit navigate the federal... Regulatory and legislative landscape here in D.C.. So in this space, you know, throughout the totality of my career. Environmental issues. Climate, sustainability have been at the forefront. And that's true for more traditional. Sources like oil and gas who have who need to demonstrate. A societal license to operate. Or newer sources like wind and solar. That are coming on in a big way. Who have their own challenges in the ESG space. Dentons firm-wide has a real commitment to ESG. We are the world's largest firm. So ESG. Comes across in a variety of different jurisdictions where there are each challenges and opportunities in this space.
Andrew Shaw - 00:03:23:
So both of you, and thank you for joining, both of you all are seeing, obviously, a big change in the landscape here, Andrew, whether it's on new energy sources and types of businesses. And Vid is moving from what's typically been covered in environmental law to the new types of businesses that are covering. Vid, can you talk a little bit about the transition of why that's happening? Why are... Services companies and law firms and suppliers being held accountable to these things. What's going on there and what's pulling them into this world?
Alex Lassiter - 00:03:54:
Yeah, I mean, look, climate change is an existential crisis for everyone. And that's causing employees and managers and the companies themselves to recognize that they have a place. In solving that problem. Especially in this sort of, in the United States in particular, where there's just a lot of political lockup in that arena, the private sector sort of has to lead. And so they're doing that. And it's a great way for a company to distinguish themselves. Among their competitors. And so there's also, you know, whether that's for sourcing talent. Or whether that's for selling a product, it's just a great distinguisher. And if it promotes a value that they hold core within themselves anyway, all the better. And so for all of those reasons, you're seeing more and more companies lean into ESG and in doing so. They're forcing their vendors to do so. And so there is a trickle-down effect, and you're seeing a number of really prominent companies across the board. The spectrum of companies in the U.S. Really focus on this and as a result even law firms are finding ourselves. Um, responding to those requirements. A few law firms have sort of affirmatively decided to take steps in that regard, but for the most part, it's much like in every other arena. We respond to the needs of our clients. When our clients are telling us that something's important to them. Guess what? It becomes important to us.
Andrew Shaw - 00:05:29:
That makes no sense.
Vid Prabhakaran - 00:05:30:
Andrew? Yeah, I would echo Vint's comments in a lot of ways. You know, working in the energy sector, uh... Environmental and sustainability issues have always been at the forefront but with the challenge that businesses in the energy space are facing. Now with the need to mitigate emissions, that's been magnified to a significant extent. And I think. The talent recruitment. Uh, area is particularly important to our companies and it's important to firms too. Younger workers are demanding and want. Companies want clients to be committed to sustainability and climate pledges. And also want those. Those pledges to be verified and be accountable. As they go forward.
Andrew Shaw - 00:06:23:
So when a Fortune 500 or a S&P 500 company, huge, huge global company says, We're going to. We're going to net zero. We're gonna reduce our emissions down and we're gonna engage our suppliers. What does that actually mean? So, Vid, you mentioned law firms as an example, responding to requests. What are those requests? Is it a, hey, we hope you can do this? Is it measure your footprint? Like, what are they asking you to do?
Alex Lassiter - 00:06:54:
It rages. Um, so. For those who are just first starting out down that path. Most of them are simply asking that we care about this and they want usually to know that there is a commitment by their vendors to focus on sustainability in some way, whether that's emissions reduction. Or just sustainable practices within their own companies. Often it's just a, even just a. Statement of support for that goal. And that's sort of the first step, because that's often their own first step. They've made a vocal commitment for it. They want to know that their vendors are also making a commitment towards it. It then ranges all the way up to... You know, companies that have actually measured their own emissions profiles and footprints. Including assumptions associated with their their downstream vendors and basically getting those vendors to actually count and give them actual quantifiable data. As opposed to just the estimates that those. Companies have been using. And then once they have that. Once they have those actual numbers. They're then looking to have those third parties actually reduce them and to actually hit targets. Emissions reductions targets. The number of companies that are sort of formulating and forcing that last piece, it's pretty low at this point. Right now, most of them are, you know, recognizing that the. Vast majority of. Their vendors are not there yet. So most of them are just starting with the, hey, show us that you have a commitment. Create a plan. And start counting. And so they're usually at that stage of the life cycle.
Andrew Shaw - 00:08:40:
Andrew, you have such a good perspective at Dentons being such a global firm of what's happening everywhere. And there's been significantly more regulation, but it's starting to move this way as well. What have you seen in terms of the trend of this, of that kind of big parent company asking vendors and suppliers to commit? Where do you see things going here? Like, do you see this as something that's intensifying? Do you have any examples from what you've seen, you know, globally as far as what we should expect here?
Vid Prabhakaran - 00:09:08:
Yeah, it certainly is accelerating. I think the difference between the US and other markets. Such as the European Union, is significant. The US often is not the leading. Force or leading horse when it comes to kind of the global community when it comes to these issues. I think companies that are active in the U.S. And across different jurisdictions. Are trying to kind of navigate how. Their global commitments. Kind of work with the emerging kind of regulatory frameworks in different jurisdictions. It's also, I think, a challenge and an opportunity too for entity like Dentons you know we are moving forward on on sustainability and climate commitments but doing so in different jurisdictions too. I think. Creates unique opportunities and then probably some challenges as well
Andrew Shaw - 00:10:07:
If you're in professional services and you serve the enterprise, so top 100 law firm. Top 100 Insurance Company, Tom 100. Agency, you name it. Is this something that you... Is this something you foresee people being required to do? I mean, at that stage and that size, are we at the point where this is a maybe this might happen? Or is this a, hey, if you're at that stage, you just need to be doing this stuff?
Alex Lassiter - 00:10:36:
It's coming. It's coming. I mean, to me, this is. This is following the trend lines associated with. Um, for law firms at least, it's, you know. We all had sort of pro bono mandates early on. We followed that with... Sort of diversity related. Requirements And now. We're increasingly seeing sustainability sort of you know carbon emissions related. Requirements. And you know, California is sort of leading the way on this for all businesses, right? You're having disclosure requirements related to your climate risks. You're having carbon emissions tracking requirements, you're having transparency requirements. All of this stuff in California that's sort of fomenting, and it's all gonna change in this coming year. It feels like half of my work for this coming year is gonna be just following this and tracking it and letting my clients know what's going on. But you know. The reality is that all of the companies that I'm talking to are all realizing like, hey, writing's on the wall. We need to do this. And frankly. We want to do this. We want to lean into this because we want to be leaders in this arena anyway. And so why not really showcase what already some of the steps that we're already doing. You know, will be so. Um, you know, long story short. Yeah. Like. It's silly to be an ostrich here. It's silly to be a, you know, like a there's no reason not to start planning for a future where you're going to need to document your emissions. And figure out a plan to reduce them over time.
Vid Prabhakaran - 00:12:11:
And I think it's a competitive advantage, too, for our clients, and I think it's a competitive advantage competitive advantage for firms. And professional services companies that around it ahead of this curve.
Andrew Shaw - 00:12:24:
Yeah, one of the things that we hear a lot of times, especially over the last couple years, is we don't want to be... We don't want to greenwash and say that we're the best in the category. You know, we're nervous about being the first one to jump in, but we don't want to be the last one who gets in. And it sort of feels like we're at this tipping point where you're, by doing this, you're following the herd, you're as a part of it. It's not a, if you do this, you're staying out of ledge by yourself. You know, Vid, you mentioned being an, there's no. Nothing to be gained here by being an ostrich around it. It's by not doing it at this point, you're... You're frankly outside the norm.
Alex Lassiter - 00:13:01:
Yeah, you're outside the norm at this point. It feels, you know, at this point, if a law firm... Isn't sort of planning for a future where a significant amount of their work. You know, if you're, if you are in the the sort of environmental or energy space. Like a significant amount of your work. In the future is going to come from. Companies that are doing ESG initiatives and are looking to do some of the establishment of power purchase agreements and carbon offsets and transportation electrification for fleets. All of that work. Is likely going to be coming not just from the energy company side but also from the the the the purchaser side. So you need to lean into that. Similarly, many of these companies are looking at their procurement processes. And thinking about how they push them down to their own vendors. And so if you... Are involved in establishing know vendor you know vendor cycles and and all the the sort of contract requirements around that You need to be focusing on that, right? And so. There's an aspect of like, Hey. You know, the E, S, and then the G, the governance. Like if you are advising corporate boards and trying to explain to them. How they need to sort of. Catch up to what will be future Securities and Exchange Commission requirements and CFTC requirements. There again, you need to be ready to offer that service to your clients. So every law firm is thinking about this in some way. Arm. What they may not be doing and what they should be doing is also thinking about, Oh, Well, if we're going to sell this, We need to be doing this ourselves. Right. And so there's that aspect of this, which is like, oh, right. Yeah. You know, like we need to we need to make sure and handle this ourselves, too.
Andrew Shaw - 00:14:51:
Absolutely. When Andrew, you know, obviously both of you have been doing this for such a long period of time. Like as you think about helping your clients navigate things, there's obviously the navigation around reporting, but also the navigation on all of these different things you can do to reduce, whether it's power sources. You mentioned virtual power purchasing agreements, EV, and there's maybe a lot of people who listen to this who don't even know what a Virtual Power Purchase Agreement is. How are you helping people? And can you talk to me a little bit about what you've seen as you're, you know, maybe helping a customer who typically has not been exposed to these different things? Like what sorts of conversations are you having and, you know, how does it? How does that change over time?
Vid Prabhakaran - 00:15:33:
Yeah, that's a great question. Again, kind of working with energy companies, I think the E part of... ESG has... Has been in their Uh, The forefront of their concerns for a long time. So I think many energy companies, again, regardless of their stripes are spending a lot of time on figuring out how they can move forward on ESG work. I think. The interesting thing that we particularly have seen has been a of reconsideration of how some companies are actually increasingly being viewed in a positive light in the ESG space, you know, for instance, mining companies. Mining companies need are essential to our clean energy. Build out whether that's developing in processing lithium for various applications or even. Uranium for nuclear energy, which is essential. Um, So I think. Helping clients kind of understand the emerging framework. Both here domestically and internationally. On where climate policy is going is helpful to them. Obviously there's a lot going on at the SEC. There's kind of a political back and forth on the Hill. Um, I think. Clients to move forward. Even more than they're already doing. They do need kind of stable. Policy. At the federal level. And that's sometimes challenging because, you know, we have electoral cycles here that can sometimes be different with that.
Alex Lassiter - 00:17:17:
Yeah. Yeah, I agree with everything Andrew just said. Being in California, we'd love to think we're the arbiters of all things green. Which is completely false, but we often create really bold. Initiatives that we kind of throw against the wall and then everybody freaks out and we week. Right. And so, you know, that regulatory certainty. Is really really crucial for everyone and so that's one of the things that often our clients are coming to because they're freaking out because they hear about some sort of new piece of legislation. Often happening in California, but it will happen federally. As well. And all of a sudden, you know, oh my God, how do I comply with that? Or how do I take advantage of that in the case? You know, the infrastructure act. Um, the inflation reduction act like you know that's the kind of thing where we're often called it But to your question, oftentimes what I'm facing right now are new clients, folks who who are often clients of the firm in some other meaningful capacity. But have restructured or created their first sustainability department. Which is often one person, one lonely person who's now... In charge of sustainability worldwide for us. Huge massive company and and are like well what does that mean How do I do this and how can I? Utilize you all to make my life easier. And often the way that we engage with them is, okay, what are your goals? What's the company's goals, right? Are you focused on ESG from a governance standpoint? Meaning, are you really focused on making sure that your board is aware of what... Obligations might exist. You know, company-wide. Okay, well we've got... A suite of stuff that we might do to support you in that arena. A lot of them are actually more focused on the fact that they're that their business folks, their sales folks. Are really interested in leaning into a sustainable sales pitch. A lot of them are talking about the sustainability of their... Their product the the processes that go into it they're talking about delivering a you know. Carbon-free product or an organic or a green product. And labeling, putting labels on things that aren't. Clearly defined. And so we do a lot in that space, right? Like helping folks ensure that they're not doing greenwashing, that they're not opening themselves up to it. Know to to a fraud claim or or anything of that nature right really making sure that they document why in fact they feel like they cannot actively claim. Whatever label that they're claiming. So there's a lot in that space. There are others that are really focused on, hey, You know, we want to make sure our supply chain up and down. Meets the same values that we have. How do you set that up? Got folks who do that. And then there are the folks, and this is more my bread and butter. They're actively saying, look, we are focusing on reducing our carbon emissions. And so we want to do things like put solar on our. On our parking lots. We want to do things like. Put EV chargers in every one of our parking lots. We want to... Actually completely change out our fleet. And have them be all electric vehicles. We want to buy renewable power and have, you know, be credited for, for. Using renewable power. We want to buy energy efficiency so that we can reduce our overall consumption. Those kind of measures, which ultimately often just go to the bottom line. You're reducing their cost. So we get called in for that. So it really is all over the spectrum. It usually starts with that one dude. Who's now the head of sustainability at their company. And they're like, Cool. Don't know what that means. Got like 50 different possible goals here. Can you help us?
Andrew Shaw - 00:21:13:
I mean, that's a dizzying amount of things for people to undertake. Do you think that businesses... Do you think the majority of business owners... Understand both the opportunity but also the amount of work ahead of them to be able to get there.
Alex Lassiter - 00:21:34:
Yeah, it's a good question. Yes and no. Like, I think people, like, they understand the opportunities that there are some real cost reductions. That they can create by just being more energy efficient. So like that part is something that many of these business owners have been attuned to for years so this is just like a natural extension of that um and they're really cognizant of sort of the costs associated with accounting and reporting requirements. And that's like, you know, banks will tell you from the beginning, like there's such a significant compliance cost to their to running their operations. Right. And so folks know enough people in those industries where they realize like, OK, that's going to be a real cost to me. So they have some inkling of that. I think what they're not ready for or prepared to do is sort of invest human resources, human capital. Into making this like a new department. You're not seeing. Too many know like they'll be like a sustainability head but there's not like a whole sustainability department. So I think that's what's coming. And as that's coming, I think the amount of work for law firms and consultants and you know, auditing companies and software providers is just going to skyrocket because the scope of this is going to increase, increase, increase as human capital is put into these companies to focus on these and then they start realizing like, oh, there's 50 different things I can do here. I need more people to manage all these different projects that are becoming more and more mission critical. You know, and I need help with that.
Vid Prabhakaran - 00:23:10:
I agree with what that said. I think. You know, from what i hear from folks that we work with in the energy sector, they are acutely focused on. You know, whatever the timeline is, 2035 for the electricity grid, 2050 for... Net zero economy-wide generation, or clean energy generation. They are looking at how they build out their companies to take advantage of the opportunities from a business perspective. And the challenges that they're gonna have to navigate. And that their customers are going to have to navigate. Over the years to come. I, I. Do think that kind of the more granular you know, day to day operationalizing. The sustainability ethos. And the reporting and quantifying. I think that will be developed more as we see potential SEC regulations. Other um kind of California is a... At the forefront as they always are here in the U.S. But I think as these processes get more mature, I think. Businesses will figure out. How to be able to. Adapt their internal resources to be able to meet those requirements and push more aggressively and harder.
Andrew Shaw - 00:24:33:
Makes a ton of sense.
Alex Lassiter - 00:24:34:
And alex i mean to the you know something andrew just said really popped in my head, which is like, it's internalizing it within the companies, right? And so... Like right now. When you talk to most companies, you know, diversity is now a core value. Right, like, like, it's something that they all routinely say, yeah, like, this is just part of who we are. You don't hear that as much about sustainability, right? Like it's not like not every business yet has sort of said like sustainability is just a given core value. But it pretty much is. It just isn't spoken. And And so as it becomes more clearly in the mission values, listed for every company and it's spoken throughout the organization. That's what's good. And it starts getting embedded into every level of decision-making at that company. Okay, well, if you're going to try to embed it, well then you need to have some sort of accounting to embed it in there. Those are the kinds of things that are coming. Um And there are very, very few companies that are actually embedding it into their structures just yet. But you can see it happening.
Andrew Shaw - 00:25:40:
It almost seems like it's gone from, at least again, diversity, for example. You kind of had the head of diversity. And you were like, we aren't, but we have the guy. We have the person that does this. Today, you don't see that as much. You see it as more as everyone's trained on this. They think about it. You're hiring new people. You know, are tasked with managing or growing a team, but they already have the training of this and they've got the metrics and it's built into who they are. And on the sustainability side, it's sort of we're not, but we have the sustainability person or we have the sustainability thing, but not everybody's going to have to learn to speak. Climate to some extent. And it'll just be a different, different level if you're in procurement or if you're in. Finance or you're in facilities or office planning, whatever it might be like. You know, your role is just going to have to learn this stuff. And it's going to take time. Well, guys, this has been very, very helpful. I know we've just covered a tiny piece of this, but for folks that would like to learn more, get in touch with you, I know both of you all produce some really insightful content on a regular basis. I certainly subscribe to both of your newsletters. But, Andrew, how can people get in touch with you? And, Vid, how can people get in touch with you if they want to learn more?
Vid Prabhakaran - 00:26:58:
Well, I'd love to hear from folks. It's an exciting opportunity. There's a lot of challenges and opportunities ahead in the months and years to come. Feel free to email me, andrew.shaw@dentons.com. Love to hear from anyone.
Alex Lassiter - 00:27:15:
Yeah. I've always loved, I mean, I love to talk about this stuff. Geeking out on this is a great pleasure. I'm listed on my firm's website, www.dwt.com. You can email me at vid at dwt.com. Let's chat.
Andrew Shaw - 00:27:33:
Awesome. Thanks guys. Really appreciate your time.
Vid Prabhakaran - 00:27:35:
All right. Take care.
Alex Lassiter - 00:27:36:
Thanks so much.
Voiceover - 00:27:37:
Thank you to Vidhya and Andrew for joining us, and thank you for listening. If you like this show, be sure to leave a review and follow this podcast wherever you like to listen so you don't miss an episode. This podcast is powered by Green Places. If you are looking to reduce your company's environmental impact and reach your sustainability goals, visit greenplaces.com to learn more. We'll talk with you next time on Open Source Sustainability.