Few developments have transformed the legal landscape as swiftly as the rise of Environmental, Social, and Governance (ESG) considerations. 

What started as a business-led response to sustainability concerns has now evolved into a multi-faceted ecosystem of regulatory requirements, stakeholder scrutiny and legal obligations which has cut across virtually every area of legal practice.

Legal professionals are increasingly called upon not just to interpret the laws, but to guide clients through complex ESG-related risks, evolving disclosure standards and reputational risks. 

Why ESG Matters to Lawyers Now 

The rapid growth of ESG-related regulations, both globally and in Singapore, has introduced new layers of legal risk for businesses and legal practitioners are on the frontlines. 

Today, lawyers must proactively incorporate ESG risks into day-to-day legal advice, compliance assessments and broader risk management strategies. All of this is essential to help clients stay ahead of regulatory and reputational challenges.

In Singapore, this shift is particularly visible. 

For example, in 2025, Singapore-listed companies in key sectors such as financial services, agriculture, energy and transport are required to provide climate-related disclosures aligned with international standards specifically, those related to the Task Force on Climate-related Financial Disclosures (TCFD). 

The TCFD framework, already widely adopted in major financial centres, requires companies to disclose clear, data-backed disclosures across four key pillars: governance, strategy, risk management, and metrics and targets relating to climate risks and opportunities. 

From a legal standpoint, this translates to greater responsibilities by advising boards on governance mechanisms, mitigating liability through careful disclosures and ensuring that contractual terms align with the emerging ESG standards.

A Shift in Mindset and Legal Practice

In addition, the Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX) have signalled that their requirements will also progressively tighten to enhance market transparency, clamp down on greenwashing and support Singapore’s broader green finance ambitions. 

In time, these disclosure obligations are expected to extend beyond listed companies to include large non-listed firms and financial institutions, as part of an economy-wide push for credible, comparable ESG reporting.

For legal practitioners, these developments raise immediate implications:

• Helping clients to future-proof their compliance strategies by reviewing corporate governance arrangements to ensure boards have the expertise and oversight mechanisms to meet TCFD-aligned requirements.
• Balancing disclosure obligations with legal exposure.
• Advising on sustainability-linked deals, investment risks, and ESG-aligned contractual clauses that align with evolving reporting standards.
• Navigating cross-border regulations to meet investor expectations across jurisdictions. 

Ultimately, these changes reflect the growing expectation that lawyers are no longer compliance gatekeepers but they are strategic partners in building responsible businesses.

ESG and the Evolving Role of Lawyers in Transactions and Advisory Work

ESG considerations are no longer peripheral and are becoming central to how deals are structured and legal advice is given. This evolution is refining  transactional practice, influencing contract terms and reshaping legal strategy across industries.

Whether advising on mergers and acquisitions, joint ventures or capital market deals, ESG issues are now critical deal drivers. Lawyers are seeing ESG issues surface in areas such as:

• Contractual obligations, where sustainability-linked clauses, environmental warranties, and ESG performance covenants are negotiated and enforced. 
• M&A due diligence, with investors scrutinising target companies for climate-related risks, supply chain vulnerabilities, human rights issues, and governance structures.
• Disclosure obligations, particularly where deals may trigger regulatory reviews tied to sustainability commitments, emissions reporting, or biodiversity impacts.

This trend is especially evident in sustainable finance, where lawyers play a critical role in structuring green bonds, sustainability-linked loans, and carbon credit transactions. In these deals, precise drafting is essential — not only to prevent ambiguity, but to reduce the risk of greenwashing allegations and regulatory scrutiny. Achieving this requires ESG-related targets to be clearly defined, measurable, enforceable and aligned with applicable standards.

The growing complexity of carbon markets and voluntary carbon credits adds another layer of challenge. Lawyers must navigate evolving verification requirements, inconsistent jurisdictional rules and emerging industry standards — all while safeguarding their clients’ legal positions and reputational standing.

In this environment, legal advisers are expected to strike the right balance: enabling innovation in sustainable finance while ensuring clients remain compliant, credible, and protected from avoidable ESG-related disputes.

Beyond transactions, ESG has caused a surge in strategic advisory work as clients are looking to their legal counsel to help them:  

• Build robust governance frameworks that integrate climate and social risk oversight.
• Conduct human rights due diligence for multinational operations and supply chains.
• Navigate fast-moving and divergent ESG regulations across jurisdictions, especially where ESG obligations differ across jurisdictions.

For legal professionals, this means going beyond black-letter law. It is reshaping mainstream transactional practice, making it essential for lawyers to have an ability to translate ESG trends into legal strategies that manage risk while driving business opportunities. .

ESG Litigation Disputes and Enforcement Trends

Disputes and enforcement actions tied to ESG are also on the rise globally, and lawyers are increasingly on the frontlines, both in preventing these issues and responding when the need arises.

Globally, ESG-related litigation is on the rise and they engage a spectrum of legal issues, including:

• Greenwashing claims, where companies face legal action for misleading or exaggerated environmental or social claims in marketing, product labelling, or investor communications.
• Climate change disputes, including lawsuits against governments, financial institutions, and corporations for contributing to or failing to address climate-related harms.
• Human rights and supply chain accountability cases, particularly involving allegations of labour exploitation or environmental damage tied to corporate operations or third-party vendors.

While Singapore has not seen ESG litigation on the scale of the US or Europe, regulatory scrutiny is increasing. 

Both MAS and SGX have clearly signalled stronger enforcement around sustainability disclosures and a hard stance against greenwashing. As mandatory reporting expands and public expectations grow, the risk of legal action — whether from regulators, shareholders, or other stakeholders — is set to rise.

For legal professionals, this shifting landscape requires:

• Scrutinising ESG disclosures to ensure they are accurate, defensible and aligned with regulatory requirements.
• Drafting of sustainability-linked clauses with clarity to minimise ambiguity or exposure.
• Advising on ESG governance and compliance, helping clients meet both legal and stakeholder standards. regulatory requirements and evolving stakeholder expectations.
• Preparing to respond to disputes, including regulatory probes and reputational issues from ESG-related allegations.

In essence, ESG has broadened  the legal dispute landscape beyond traditional financial or operational risks, introducing new legal vulnerabilities tied to transparency, ethics, climate responsibility, and reputational integrity.

Implications for Legal Professionals

For legal practitioners, ESG is no longer a niche concern/area of practice and itis becoming a permanent fixture of mainstream legal work. Whether you are advising on cross-border deals, reviewing board governance, or mitigating litigation risk, ESG considerations now influence decision-making at every level.

To stay effective, legal professionals must:

• Stay updated on evolving ESG regulations, both locally and internationally.
• Integrate ESG risks analysis into contract drafting, governance reviews, and transactions.
• Understand the legal implications of  ESG claims, reporting obligations and reputational risk.
• Collaborate with experts across disciplines — including sustainability, compliance,  and risk management professionals. 

Organisations like the Singapore Academy of Law (SAL) are stepping up to support the legal professionals through curated resources, seminars, and knowledge platforms.

Looking Ahead: Building ESG Readiness in Legal Practice 

As ESG continues to shape corporate strategy and legal obligations, legal professionals have a critical role in guiding businesses through this evolving landscape. From drafting clear, enforceable sustainability-linked contracts to helping clients navigate ESG disclosure rules and enforcement risks, legal professionals are key to driving responsible business practices and building long-term resilience.

Upcoming Workshop: “Integrating ESG into Corporate Governance and Compliance”

For legal professionals looking to sharpen their ESG capabilities, SAL’s upcoming workshop is tailored to equip you with the skills to advise on ESG governance, risk and compliance, with confidence. Find out more here.