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Why legal experts ought to be an integral part of an ESG transition

A recent whitepaper from Stephenson Harwood highlights the steps needed to accelerate the embrace of ESG in Asia and the criticality of legal services in assisting companies with this transition.

Stephenson Harwood's Hong Kong office recently published its inaugural ESG white paper — 'From uncertainties to opportunities: How lawyers can support Asia’s transition to a low-carbon economy'. The authoritative report explores opportunities and challenges of Asia's transition to a low-carbon economy, based on perspectives culled from interviews with 26 decision-makers in the finance, business, and legal sectors.

While the need for sustainable development was universally recognised by the decision-makers, views differed on the speed of transition and how it should conform with financial returns. Interviewees also expressed confusion over definitions of ESG and sustainability. Clarifying these concepts and assuaging related concerns, the white paper said, could help bridge the gap between financial and sustainability objectives.

Other views noted the lack of enforcement and poor quality of disclosure in jurisdictions like Hong Kong, which respondents said lead to market uncertainty while hindering investment decisions. A set of emerging global standards may help, they added, if compliance was properly mandated and supported.

Turning its eye on the shipping industry, the report noted, among other things, that the sector faced fuel choice uncertainties that complicate investments. For instance, while market leaders explore viable but expensive solutions like methanol and LNG, such options may not be entirely available to smaller players. The consensus: Collaboration is crucial given shared goals and interdependencies, and technological innovation presents profitable opportunities if risks are collectively understood.

Generally, respondents agreed that achieving Scope 3 greenhouse gas (GHG) emissions accountability — under international frameworks like the global Task Force on Climate-Related Financial Disclosures (TCFD) or International Sustainability Standards Board (ISSB) — requires translating commitments into binding agreements. Legal services, they said, could help craft unbiased solutions that uphold reductions across complex supply chains, with updated regulations providing a clear transition blueprint that incentivises early action.

It was also the consensus that whether they are viewed as risks or opportunities, ESG factors implicitly inform all investment assessments. To this end, lawyers should anticipate regulation, build ESG literacy, and craft actionable bespoke ESG-aware advice based on specific client context. Doing so would catalyse much-needed systemic change and spur effective evolution toward integrating ESG into mainstream investment decisions, the report concluded.

To access the full report, please visit the Stephenson Harwood website.



This publication contains general information and is not intended to be comprehensive nor to provide financial investment, legal, tax or other professional advice or services. This publication is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any investment or other decision or action that may affect you or your business. Before taking any such decision, you should consult a suitably qualified professional adviser. While reasonable effort has been made to ensure the accuracy of the information contained in this publication, this cannot be guaranteed and none of Stephenson Harwood, PIE Strategy Limited nor any of their subsidiaries or any affiliates thereof or other related entity shall have any liability to any person or entity which relies on the information contained in this publication, including incidental or consequential damages arising from errors or omissions. Any such reliance is solely at the user’s risk. The editorial content contained within this publication has been created by PIE Strategy Limited in collaboration with Stephenson Harwood.

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