ESG reporting for law firms: how to create a professional ESG report

Introduction: Understanding ESG reporting for law firms

For many years, it has been enough to be a good lawyer. Deliver solid advice. Have control over the law. Get cases across the finish line. Despite this still being the core of the business, clients are increasingly starting to ask for things that have nothing to do with legal advice. How do you run your business? What do you stand for? Do you have control over AML? How do you treat your employees?

ESG is the answer to those questions. Not as a buzzword, but as a way to make your business transparent and relevant in a market that has moved. Transparency is key, and ESG makes it possible within a framework to explain how a law firm performs.

This is where you collect data, structure your efforts and show the outside world how you work with governance, employees and responsible operations. Not because you have to, but because more and more expect it.

For law firms, it is not about looking like an industrial company with CO2 reports and climate targets. It is about being able to document that you run a professional and responsible business that clients and partners trust. And if you cannot, there is a real risk they will choose someone else who can.

What does ESG reporting for law firms cover?

ESG reporting for law firms is a structured way to document and communicate how you run your business responsibly across the three core areas. It is about making it concrete and measurable, which is otherwise often described in broad terms.

For law firms, the reporting typically does not cover production and CO2-heavy processes, but the areas where your business actually has impact. This can be governance structures, compliance processes, handling of conflicts of interest, employee conditions, diversity, work environment and how you work with clients and partners. The purpose is to create a clear and credible picture of how your law firm operates in practice. Not just what you say, but what you actually do. When done correctly, ESG reporting gives clients and partners a solid basis to assess your quality, risk profile and long-term relevance.

Why has ESG reporting become so critical for law firms?

ESG is not something slowly entering the legal industry. It is already here. Not because lawyers have asked for it, but because the pressure comes from outside.

Clients increasingly sit with their own ESG requirements from investors, boards and regulation, and it does not stop at their own business. It is pushed down the value chain. And that includes lawyers. When companies are measured on their risks, governance and responsibility, they also need to document who they work with.

This means in practice that ESG is no longer something that only belongs in large corporations and annual reports. It has become part of the selection of advisors. If a client must choose between two law firms with the same legal capabilities, the one that can document structure, governance and responsibility will stand stronger. At the same time, regulation is moving in the same direction. The EU is increasing requirements for reporting and transparency, and even though law firms are not always directly covered, they are indirectly affected through their clients. This is where many realize it too late.

ESG is not a requirement that hits you directly first. It is a requirement that comes through your clients. And if you cannot deliver the documentation they are asked for, there is a real risk they will find someone else who can.

What should an ESG report for a law firm include?

The short answer is that it should include what is relevant. The slightly longer answer is that this is exactly why many get stuck. They try to take starting point in large company reports and end up with something that does not fit their own business. A law firm with 500 employees has a completely different ESG profile than a firm with 25.

The VSME framework is designed to avoid exactly this. It cuts it down to what actually makes sense for small and medium-sized businesses, including law firms.

Here is what it typically looks like in practice.

Governance: the most important for law firms

If there is one area where law firms are truly measured, it is governance. It is about how you run your business. Not what you say, but how you are structured.

An ESG report should at minimum cover:

• Whether you have an AML policy
• Whether you have control over GDPR
• How you treat your employees
• Diversity in staff and leadership

This is not new for you. What is new is that it needs to be documented and communicated together, and that it follows a framework that makes you comparable to other law firms.

Social factors: employees and culture

The legal industry is a people business, and your people are the primary engine of your business. Therefore social factors matter more than environmental for most firms.

You are expected to be able to say something concrete about among others:

• Employee wellbeing and work environment
• Diversity and gender distribution
• Retention and development
• Work-life balance and workload

It does not need to be advanced. But it must be honest and concrete, and something an outsider can understand.

Environment: keep it relevant

For most law firms, environment is not the main focus. This does not mean it should be ignored, but it should be kept proportional.

Typically this will include:

• Energy consumption in offices including heating and water
• A CO2 calculation including scope 1, 2 and 3
• Simple initiatives such as reducing paper usage

The mistake many make is overcomplicating this. Law firms do not have a large footprint, but that does not mean there is no impact. It just exists elsewhere.

How do you create an ESG report for a law firm?

Most make it more complicated than it is. ESG is not about building a massive compliance setup from day one. It is also not about creating the longest report possible with pictures of meeting rooms and employees smiling at books. ESG is simply about structuring what you already do, putting it on paper, and telling the story behind the data.

If you have been tasked with creating an ESG report in a law firm, here is a simple process to get a professional report in place without it taking a year.

1. Choose a framework

A framework forms the structure of the ESG report as a whole. It helps internally with understanding what and how to report, and it helps others understand the assumptions and methods used, making it easier for clients and partners to relate to.

There are many frameworks, but we believe the only one that really works well for mid-sized law firms is VSME. It is developed by the same bodies behind CSRD and ESRS and fits into what clients expect. If you are not already committed to another framework, start with VSME.

2. Conduct your analysis

Before you start collecting data and writing reports, you need to figure out what is actually relevant for you. This is where most either overcomplicate or miss the point. In VSME, not everything needs to be included. Many datapoints are only relevant if they make sense for your business.

The most effective way is to use the 10 sustainability topics in VSME and perform a double materiality analysis. It sounds heavy, but in practice it is about two things. What you impact, and what impacts you.

For a law firm, it quickly becomes clear that ESG is not about production or complex climate data. It is about governance, compliance, employees and how you work with clients. That is where your ESG lives.

Be practical. Look at what you already do today. Where you have policies. Where structure is missing.

The goal is not to invent new initiatives. The goal is to understand your current setup so you know what is worth reporting.

3. Create a data plan

When you know what is relevant, the next step is to define how you measure it. This is where a data plan comes in. In VSME, it is not about collecting everything, but collecting the right data. Each datapoint should be linked directly to what you have identified as material.

Start by translating your material topics into concrete datapoints. What do you actually need to document. You can find almost everything in VSME, there is no need to get creative. Less is more. Start with the framework and build from there.

For most law firms, much of the data already exists. HR data, compliance processes, governance structures and internal policies are already in place. It is about gathering it. Keep it simple. Who owns the data. How often is it updated. How do you ensure consistency.

If something is difficult to measure, it is often a sign it is not the right place to start. VSME is built to be practical and your data plan should reflect that. The goal is not perfection, but clarity.

Even if it may seem like it, you should not invent a data plan. VSME tells you what to include. Read it and start there.

4. Collect data

Now you do the work. Some things can be pulled directly from existing systems. Others require manual work the first time. That is normal. The most important thing is to get started. Not to make it perfect.

Once you have done it once, it becomes much easier the next time.

If you want to make it easier, you can use a system like Wardn. It makes it simple to collect exactly the data needed and update it year by year.

5. Write your ESG report

This is where everything comes together. The analysis, the framework, your brand, the data. The easiest way to start is by creating a template. It should include your branding, logo and structure.

Once the template is in place, you begin inserting data. Start with the data, then add commentary where needed. It usually becomes clear what needs explanation.

An ESG report does not need to be long. It just needs to show where the firm stands today.

ESG software for law firms

Most law firms start ESG work in Excel. It makes sense. The problem is it rarely stays there. Data becomes scattered, versions unclear, and ownership lost. This is where ESG starts to feel complex.

ESG software solves one problem. It structures everything in one place. Data, policies, documentation and reporting.

For law firms, the value is not advanced models. It is overview. Who owns what. What needs updating. How it all comes together.

The difference is not whether you can create a report. It is how much time it takes and how easy it is to repeat.

If ESG is more than a one-off, you need a scalable setup. That is what software enables.

Wardn ApS is the largest ESG software provider for law firms in Europe. The platform is built specifically for ESG reporting in professional services and makes the process easier, faster and more accurate.

Frequently asked questions (FAQ)

1. Why should law firms create an ESG report?

ESG reporting is a structured way to document how a law firm works with governance, employees and responsible operations. It makes it clear for clients and partners how the firm operates and what risks and strengths exist.

2. Is ESG reporting mandatory for law firms?

No, ESG reporting is not directly mandatory for most law firms. However, it becomes an indirect requirement through clients who are subject to regulations like CSRD.

3. Why is ESG important for law firms?

ESG affects who gets selected. Companies working actively with ESG grow up to 40% faster, and many require ESG data from their partners. Firms with ESG documentation stand stronger.

4. What should an ESG report include?

An ESG report should follow VSME and focus on what is relevant. Governance, employee data and limited environmental data. The focus is relevance and documentation.

5. How do you get started with ESG reporting?

Choose a framework, perform a materiality analysis, define data, collect it and build your report. Most data already exists internally.

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