Firms that reduce and offset their carbon dioxide emissions are not only helping the environment but helping themselves, writes Trevor Moss


For law firms, a direct correlation exists between insurance purchase and carbon dioxide emissions. The items solicitors insure during the course of their commercial activities, such as buildings, cars and travel, are also likely to make the largest contribution to their carbon footprint.



Stakeholders such as clients, investors, principals and staff are protected by a firm's attitude to risk management, including provision of professional indemnity insurance. It is often the same stakeholders who have become increasingly concerned that law firms account for their contribution to the environment within their corporate social responsibility (CSR) programmes.



In response to a recent survey, 71% of respondents said they would like their firms to move towards becoming carbon-neutral.



However, if CSR is viewed as a driver of good deeds, it can, in certain circumstances, become an inhibitor for solicitors who fail to demonstrate that they are taking action against global warming. For example, the Carbon Disclosure Project (CDP) embraces all FT500 and FTSE350 companies, and is fast cascading down supply chains. Such businesses are increasingly likely to appoint only law firms that mirror their stated corporate values in respect of environmental impact. Solicitors may risk removal from supply chains (in terms of professional services) by not having a suitable response that reflects the CDP objectives.



A number of top-100 law firms have taken the initiative to reduce CO2 emissions and offset their residual emissions by way of either purchasing carbon credits or donating amounts to verified charities to do the job for them.



For a typical firm, there is a correlation between the cost of carbon offsetting and the cost of professional indemnity insurance - this offset cost is relatively modest at around 5% of the premium. Therefore, where insurers are prepared to offer premium discounts of this magnitude, enabling firms to fund the offset of their CO2 emissions, two objectives are achieved at once.



Insurers view climate change as the major risk exposure for the future. The Association of British Insurers has developed an initiative to encourage policyholders to become carbon neutral. Certain insurers hold the view that legal practices that promote good CSR within their culture are also likely to have a similar approach to risk management, and so are therefore a more attractive risk from a professional indemnity perspective.



By reducing and offsetting an organisation's carbon emissions, a firm has the ability to:

l Demonstrate commitment to environmental responsibility;

l Satisfy the local community, stakeholders (including staff /recruits) and government of green credentials;

l Minimise the risk of removal from supply chains on environmental grounds;

l Meet corporate social responsibility strategies;

l Prepare for future regulations to limit greenhouse gas emissions; and

l Identify its commitment by way of a quality mark on marketing and other material.



A firm demonstrating commitment to reducing emissions not only contributes to the solution, if only in a modest way, but will also be seen as a shining example to others to do likewise. If this is achieved through the purchase of insurance, then some of the heat will have been taken out of the offset purchase process and also out of the environment.



Trevor Moss is director of the professions division of TL Risk Solutions