Colin Hulme, head of intellectual property (IP) at Burness Paull, considers the impact of environmental, social, and corporate governance (ESG) programmes on the observance of copyright by corporates

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To set the scene, I found real value in the British Business Bank’s definition of ESG as: “a collective term for a business’s impact on the environment and society as well as how robust and transparent its governance is in terms of company leadership, executive pay, audits, internal controls, and shareholder rights.”

The perception that ESG is only important for publicly traded companies is dated – it should be a topic in all boardrooms up and down the country. In my mind, ESG incorporates a great deal of the ethos behind corporate social responsibility (CSR), with additional emphasis on environmental considerations. At the core of both CSR and ESG is the need to have business practices that respect ethical values, comply with the law, and respect economic values and environmental responsibility.

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Copyright and IP compliance should be an important part of the risk management practices of all businesses. Effective compliance programmes will involve corporates educating employees, both old and new, on what they should do to observe IP rights and avoid infringement of these – be that inadvertent or deliberate. Inadvertent infringement of IP can come from a lack of understanding of which licences your business needs to have in place. This can be confusing, and it is important to get advice on IP licensing.

On a fairly regular basis, clients approach my team about correspondence received from the Copyright Licensing Agency (CLA). The least informed clients, who have never heard of the CLA, will ask if it is a scam. Of course, it is easy to disabuse them of that misconception. More typically, they will ask if this is something they actually need. As we now act for the CLA, we are in a certain degree of conflict in advising on this, but if we direct them to the CLA website it is pretty obvious that any organisation which copies from books, magazines or websites will need a CLA licence.

I consider compliance with the law, and intellectual property laws in particular, to be an essential part of corporate ESG policies. It is self-evident that misappropriation (or theft) of content created by authors and artists will bring with it many risks.

For publicly listed companies, displaying strong ESG credentials will make them more attractive to the growing number of investment funds seeking to invest in companies that operate responsibly and ethically. For private businesses, strong ESG credentials are of increasing importance to all stakeholders, from clients and customers to employees. Typically, larger clients or customers will now require robust ESG policies and credentials as part of a tendering process. There are very considerable gains to be achieved through a company operating with respectable ESG values.

As ESG policies require companies to have consideration for the communities and markets within which they operate, paying for content that incentivises those engaged in the creative industries seems obvious. If not paid for, all of society can suffer when the financial incentive to produce new material is removed from content creators. I know many authors and artists are not primarily incentivised by money, but this will almost always be part of the picture, especially for those who depend on the income from their creative works for their livelihood.

What motivates infringement or compliance? How could complying with IP laws bring financial gain? How does compliance weave into the ESG framework? The full-length article delves into these questions, and explores the manner in which ESG policies should impact compliance within the realm of copyright and IP.