Michelle T Davies

Michelle T Davies’ first professional introduction to sustainability put her on a “vertical learning curve”.

However, instead of being once bitten, twice shy, she was bitten by the bug – and it set in motion a stellar career in sustainability law.

Michelle, Global Head of Sustainability (EY Law), speaks to Sustainability Magazine about the countless challenges and opportunities for businesses in terms of sustainability.

The landscape is constantly changing, but Michelle is certain of one thing – sustainability is something companies can “bet their ranch on”.

Can you please tell me about yourself and your path to your current role?

I am a lawyer and have been practising for over 35 years. I always wanted to practise internationally and after graduating with a first class honours degree in Law from UCL I studied as a Fulbright Scholar in the US where I graduated with a master of law degree in international law. I then took the New York Bar and qualified as a New York attorney before coming back to the UK and qualifying here. 

My family (my husband Grahame and son Henri) are in Monmouthshire and so I spend my time between Wales and London where I work and live during the week. I love being in the countryside and as most of my family and friends are based there it is a great place to live.

I had my first foray into sustainability when I was asked by the law firm I was a partner with at the time if I would help a client looking to buy some biomass and onshore wind projects.

This was over 25 years ago when the clean energy market was in its very early stages and I was a pretty typical cross border M&A lawyer with no experience of renewable energy.

It was an almost vertical learning curve but I loved the sector and the client I was working with went on to do a huge amount more in the sector.

I was right by its side and continued to learn whilst my desire to devote my career to this new emerging area only grew.  After a few years I set up what I believe was the first pure play clean energy and sustainability team – we predominantly focused on the UK as this was a hugely buoyant market and grew to be one of, if not the, largest legal teams in the market.

When the UK Government decided to cut the subsidies for renewables we had to pivot into international opportunities – that was probably one of the most challenging times of my career as my firm had a limited global projects CV and we literally had to start from scratch.

But the team was hugely committed and driven and we succeeded and during these years we engaged on many international clean energy programmes which I am still enormously proud of today because we really did make a difference.

A few years ago EY asked me if I would join and lead the global sustainability law practice which I was delighted to do because I had just set up a wider sustainability regulatory practice in my law firm and could see the huge advantage of combining legal and consultancy skill sets.

I have been with EY for just over two years and it has been an incredible experience and opportunity to work with a much wider group of sustainability professionals covering a whole host of disciplines.

What does your job entail?

I am responsible for driving the legal practice of EY globally for sustainability.

Sustainability is one of our core global growth focus areas and accordingly a lot is expected of those in leadership positions and rightly so. My job principally revolves around three key areas:

• Identifying the global law strategy for sustainability and delivering this across all our geographies.

• Working with our colleagues in other areas to align law with their client offering so that we provide our clients with a much more integrated and enhanced solution.

• Working with clients directly on their projects and doing my day job as a Sustainability and Clean Energy lawyer to help them achieve their objectives but on a day-to-day basis.

Sustainability as a career can be considered a calling – what excites you about your job?

Sustainability is forever changing.

Years ago it was principally about decarbonisation but that is no longer the case. It now embraces so many other areas including nature and biodiversity, sustainable agriculture, sustainable buildings, sustainable tax structuring, utilisation of AI and so on and so on.

And solutions which were out of synch are now coming back in vogue – like the carbon markets – as people begin to realise that offsetting can be utilised as part of a thoughtful transition plan rather than as a licence to pollute.

It's not just a question of keeping on top of everything but more a case of being part of the wave creation rather than trying to catch it later. I love the dynamism of this sector and of course that everything we do is helping to have a positive impact.

In fact, that is where I think the meaning of sustainability is headed – it is going to be about not having a negative impact at a minimum, moving towards having a positive impact. And what negative and positive impact means will be defined by those stakeholders who ultimately determine your value. This pace and context of change is what really excites and motivates me.

What are currently the biggest challenges and opportunities?

The opportunity is the transition which needs to happen in a way which achieves a valuable positive outcome all round as per my earlier comment about the “new sustainability”. The challenges and the opportunities are intrinsically woven together.

I think we need to be mindful of where organisations are right now and the need for them to be able to transition in a commercially and financially viable way. Simply brandishing the stick will not necessarily bring about the desired outcome – we could very well end up with stranded assets but for a different reason.

Most organisations are focused predominantly on what they need to do and what they need to do is broadly a combination of what they need to do to comply with regulation, what they need to do to enable the continued engagement of their stakeholders on the same or improved terms of business and what they need to do in order to protect their business or value. Most businesses are focused on the first thing they need to do. 

There is a job to do in terms of helping businesses understand the likely future requirements of key stakeholders and begin planning for this now as well as understanding how their business will likely be more vulnerable to sustainability risk and missed value at some point in the future.  The big challenge is identifying when this change in stakeholder engagement and future risk and value parameters will really begin to impact business in terms of the bottom line or share price.

But I think the accepted thinking on this is that when it happens it will happen quickly and many organisations are simply not prepared for this dynamic shift. It is difficult persuading those with financial accountability to take action now when the landscape and timing is uncertain but the downside of not doing so could be even more difficult to take responsibility for.

What are the issues being flagged up by your clients?

Financial institutions I would say have a good appetite for sustainable assets. The challenge is securing the scale and the returns. And because many financial institutions have significant forward looking liabilities eg pension funds, insurance companies etc, they require a longer term larger access to returns which will enable them to meet these. A common theme is that there simply are not enough investable projects and companies for them to deliver their own objectives on which most of us rely.

The increase in the cost of capital has not helped and I think traditional routes to capital which have emerged over the last five years or so are struggling. I think the whole ESG greenwashing agenda has also had an adverse impact on those funds and organisations which genuinely are delivering what they say they will on the tin.

While there are many challenges I am going to mention one which is now starting to be discussed in many markets around the world as the acceptance of a transition beds in and this is skills. As I mentioned before, at some point we will see a significant acceleration of the transition and if we are experiencing challenges now around skills shortages this will become almost impossible to deal with if it is not properly addressed now. That is why we are seeing this on the agenda of many governments. It is a route to value but it is also an essential value blocker.

How can EY be a sustainability influencer?

By continuing to do what it is doing. EY is wholly client centred and looks to provide truly integrated solutions which get our clients from A to B and beyond. The future is uncertain right now but some things you can bet the ranch on and sustainability is one of them. What we want to do is help shape the future with confidence. This means that we need to work at all levels: with Governments, public bodies, international organisations, financial institutions, real economy corporates, communities, people – everyone and everything which has a vested interest in the sustainability outcome.

We need to be ahead of the curve, innovative, thoughtful and brave. I think our people are all these things and so I am very confident in our ability to help shape the future with confidence.

How do you see sustainability consulting developing in the next few years?

It will be increasingly important as long as we adapt and pivot as the market and our clients dictate. Different countries and different sectors are transitioning at different rates and in very different ways.

There is no one size fits all and I think the successful consultancies will be those which not only adapt to the wider market and economic dynamic but which focus on the specific needs of certain countries and sectors. The bespoke individual client approach will always be key but every client sits within a certain geographical or sector dynamic and being at the forefront of, and immersed in, this will help clients who sit within it. Also because the transition will require greater collaboration and alignment between organisations  which we have not really experienced before – those who get the sector and geographical factor right will be the most valuable in this I think.

To read the full story in the magazine click HERE

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