What is ESG?


You may already be familiar with the term “ESG”, yet in case not just yet – let’s start with deciphering what stands behind the E, S and G in this acronym.

ESG is a term used for an organization’s environmental (E), social (S) and governance (G) performance. A related term is “ESG investing”, where investors invest in companies based on their ESG performance. The latter term, “ESG performance”, actually also comes a lot in corporate governance-related content due to non-financial reporting requirements of which we have been seeing more and more on the news.


ESG is handled by GCs


ESG has also become a hot topic for legal professionals and especially for many General Counsels. How come? That’s because the ESG-related risks often have to be mitigated by the legal department or with the assistance of it. Risks related to human rights, child and forced labour issues in the supply chain of the company, employee relations, corporate governance issues, compliance or competition issues are just a few examples.

What’s key here is that due to globalization the world is getting more complex day by day. This also has an effect where companies having global operations need to know more about different regulations. The regulatory and legal risks are getting higher. To face these challenges, the in-house legal professionals need support mechanisms and tools to assist them. Dealing with the high level and amount of information is generally not possible without the assistance of external and local lawyers but legal technology tools are also essential.

There are many legal sources, such as the EU Green Deal, German Supply Chain Act, Net Zero Movement, UNGPs to name a few, where companies will look for more ways to have a positive impact on the people, planet and adopt good governance systems. Thus adopting relevant supporting tools and mechanisms will make life easier for the companies.


ELTA & Legal Design Turkey’s research on legal tech & ESGs


Seeing this relation between legal technology and ESG issues, European Legal Technology Association (ELTA) and Legal Design Turkey started a pro bono project called Project Octolex where the volunteering researchers will create a global directory of legal technology use cases where the legal tech tool is used for an ESG issue. This niche directory will serve as a source for those who would like to learn more about how legal technology can be used to mitigate ESG risks with legal tech tools.


About Project Octolex


Currently, a dozen volunteers are researching several continents and reaching out to legal tech providers to obtain information about their potential and real-life use cases for ESG issues, such as tools for compliance, anti-bribery, competition and ethics. Thus it is expected that especially RegTech use cases will prevail in the directory.

This ESG-legal tech movement is also important from the perspective of legal tech. That’s because of the risks that GCs face becoming more varied and complex at the same time. In Project Octolex, researchers will also analyse the effect of this trend on the legal tech field. As legal tech is also a kind of legal innovation, we expect to see the emergence of “responsible innovation” in the legal tech arena as well.

Do you know of any legal tech & ESG examples? Let us know!


If you know of any use cases or would like to contribute to Project Octolex, please email us at ebru@legaldesignturkey.com or visit www.octolex.online. Thank you!


Further resources:


For further information on the topic, here are links to some useful resources from:

Jolanda Rose and her Law Tech Advent Calendar Project for Responsible Innovation

Sophie Gould

Michele Zhou

Raymond Ng


Looking forward to comments and questions – get in touch! Thank you for reading ?



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