Only 15 per cent of respondents to a survey of 1,000 general counsel and chief legal officers from 20 countries around the world believe that their business leaders truly appreciate the risks to their organisations relating to environmental issues, including climate change and carbon emissions.

Just over a third (39 per cent) feel that leaders appreciate the risks relating to social issues, including diversity, wellbeing and employee safety. In addition, the study shows that 22 per cent of general counsel respondents believe that the environmental goals of the organisations that they work for are well-defined.

When asked about the most acute risks faced by their organisations, general counsel pointed to worries about losing customers or brand damage resulting from poor labour or environmental practices (77 per cent), and were much less concerned about barriers to investment (60 per cent) or compliance with new regulations (59 per cent)

An overwhelming majority (92 per cent) of law departments who took part in the study said that they face challenges creating policies to tackle social issues, where there are no specific regulations, and 90 per cent made the same point in relation to environmental issues.

Almost all general counsel respondents (99 per cent) expect a sharp increase in volumes of work, but they also harbour concerns about how to manage this anticipated rise. A similarly high number (96 per cent) say that their legal departments require additional expertise to manage sustainability issues, and 94 per cent state that they do not have the funds they need to manage their organisation’s sustainability issues.

The study examines how law departments plan to manage these rising workloads. It shows that 20 per cent intend to follow an “insourcing” approach, which focuses on hiring new people or re-allocating existing talent. A further 46 per cent intend to pursue an “insource and optimise” strategy, which combines hiring and re-allocating with improved technology. Around a third are looking at “mixed sourcing”, which blends internal resources with support from alternative legal service providers.

Alan Murphy, partner and head of law at EY Law Ireland, said: “Sustainability is one of the defining issues of our time. Organisations around the world are facing mounting pressure on many fronts, such as changing consumer attitudes, more aggressive regulatory authorities, shifting investor priorities and emboldened employees.

“Organisations seem to be aware they need to change, and many law departments are at the vanguard of business’ efforts to become more sustainable. They are facing undeniable challenges, not the least is the of lack of skilled resources needed.”

Stephen Prendiville, head of sustainability at EY Ireland, added: “The results of this research point to the clear divergence between what is driving sustainability in organisations, namely compliance and reporting, and what is seen as the critical risk and opportunity, namely brand value and customers retention and attraction.

“General counsel understands that reputational risks are critical, and that customers and employees expect organisations to play an active role in addressing environmental and social issues.

“This changing landscape means that law departments must expand their focus on sustainability and play a much more active role in managing the many complex environmental and social issues that their organisations are contending with.”