The Environmental, Social, and Governance (ESG) landscape is shifting. As we put together our Law Firm Social Impact Communications Report, we noticed that you’re now more likely to see website sections for social impact, social responsibility, or sustainability than ESG—even though ESG has dominated the business conversation for more than five years. Interestingly, this shift in communication is happening despite the fact that more than 40% of law firms still have dedicated ESG practices. This reflects a trend in how firms choose to present their services, adjusting their internal messaging to align with broader social impact trends while continuing to offer clients ESG expertise. This change mirrors trends in other sectors, such as finance, where ESG remains important but is being reframed in line with evolving legal and political landscapes.

This shift in language stems from three main reasons: politicization, regulation, and uncertainty. So let’s take a look at each and a possible way forward.

The Marginalization of ESG

Critics of ESG in the U.S. claim that it has no place in business. They want to see businesses operating unencumbered by regulation or politics, and argue that companies shouldn’t be spending resources addressing societal, cultural, and environmental concerns, but should instead operate with the sole purpose of achieving maximum return on investment. Some companies have even experienced investors pulling funds over an emphasis on ESG. This past year, $13 billion was pulled from funds that invest in companies that pursue ESG initiatives.

The Regulation Landscape

Regulations make companies hesitant to publish their ESG initiatives because they fear making them public will put them at a higher risk of regulatory noncompliance. As Chip Cutter wrote earlier this year for the Wall Street Journal, “Many leaders are more closely examining disclosures, wanting to avoid regulatory scrutiny or political criticism…Saying as little as possible is recommended.”

The 3 Pillar Problem

Some companies believe that if they can’t address all three ESG pillars, they shouldn’t have any at all. Take, for example, a firm that represents coal or oil companies. How can they have environmental initiatives while representing these clients? Isn’t that a conflict of interest? The solution is often to discard ESG altogether with the rationale that you can’t have ESG without the E.

The Way Forward

Despite these challenges, ESG isn’t going anywhere and companies are feeling pressure from both sides. Investors and consumers continue to demand change, and the regulatory environment has, in fact, shifted. The 2021 Bipartisan Infrastructure Deal marked a historic commitment to expanding access to drinking water, addressing the climate crisis, advancing environmental justice, and investing in communities. Should Kamala Harris win the presidential election in November, the prioritization of ESG regulations will likely continue.

So, rather than abandoning ESG, the answer is to recommit–using it as a powerful framework to organize efforts and achieve your company’s goals. ESG can be a strategic tool for analysis, revealing operational inefficiencies, weak governance structures, and potential legal risks. For investors, it provides insight into risks that go beyond standard fiscal reporting, helping them make informed decisions about long-term sustainability.

We encourage companies to challenge themselves to incorporate ESG into their goals. Many investors still recognize the value in ESG and are motivated to support causes that align with their values. We advise you to stay motivated too, viewing ESG as a mechanism for driving positive change and positioning your business for future success.

You can read more about all the reasons to remain committed to ESG in our Law Firm Social Impact Communications Report.

Three Furies is a certified woman-owned business, brand, and content strategy agency with deep experience in the legal marketing sector, including digital marketing analysis, brand and digital design, communications strategy, and advertising campaigns.