A golden compass
The Uncertain Solicitor on Three Horizons
Fans of the Philip Pullman trilogy His Dark Materials will be familiar with the alethiometer, the device which enables the heroine Lyra Belacqua to make informed decisions at pivotal moments. To keep it simple for American markets, this became referred to as the Golden Compass. I am beginning to wonder whether (and hope that) we may have something of our own golden compass available to us as we wrestle with the compounding crises that confront us, in the form of the Three Horizons, a framework for working with change.
This post will not be a comprehensive account of the Three Horizons model, largely because this has been done so well already by others more immersed in it than I currently am. For that, I would recommend the excellent seven minute video made by Kate Raworth that both summarises the underpinning theory and how it might be applied practically, and also this article by Cassie Robinson summarising a conversation with one of the framework’s great proponents, Graham Leicester.
I will, however, try to provide a high level overview of the basic principles of Three Horizons and apply that to the legal profession to give a sense, I hope, of how useful it may be as a tool for individual solicitors and law firms and their clients to assess their current practice and to map paths forward.
A simple representation of the Three Horizons framework is in the image above.
The axes of the graph represent the prominence of the different horizons and the passage of time. Horizon 1 (H1) is the red line. This is the dominant system currently; the one which is no longer serving us as well as it has in the past, indeed is a root cause of many of our greatest challenges now, but which, for the time being, remains the system we are operating within.
Horizon 3 (H3) is the green line. This is the emerging future, which we can see pockets of in the present, but which for now remains fairly marginal (think personal computing devices thirty years ago and some of the quantum mechanics prototypes being developed today). An example of what might constitute H3 today is the Doughnut Economics model, focussing as it does on creating an economy and society operating in the safe space between, on the one hand, the social foundation which ensures everyone’s basic needs are met and, on the other, within planetary boundaries so that, unlike now, we are not overshooting the earth’s carrying capacity in relation to critical life support systems. A question for solicitors might be how can we adapt our practice to ensure that new instructions and future engagements with clients facilitate the growth of Doughnut Economics principles and practice. This might be, for example, by building upon the work of the American BarAssociation in developing templates to protect human rights in international supply chains. These optimise existing power dynamics to further the shared objective of managing this risk as effectively as possible, rather than exploiting those same power dynamics to push the risk down to those least able to cope with it.
Horizon 2 (H2), the blue line, comprises the many disruptive innovations that are taking place. In some respects, this is the most critical and interesting horizon as it is broken down into H2+ and H2-; respectively those things that may enable the emergence of H3, or those which get co-opted by the current system and extend the life of H1.
One of the great attractions of this framework for me is that it recognises that all three systems are in play all the time. It is also not so crude as to propose that H1 is wholly bad and H3 is wholly good. It recognises that there are some aspects of H1 which we will always need, so it is not a case of running H1 into the ground. It does, though, mean remaining vigilant in assessing whether each aspect of it remains useful, and identifying the point at which elements of it may need to be retired and replaced with something more generative for a positive future. A live example of this is the line being peddled currently by oil and gas majors and their funders that, yes, carbon emissions do need to be reduced over time but “we do need to keep the lights on”. In Three Horizons terms, this translates as because there is something here worth conserving we are entitled to continue with Business As Usual and translates into going flat out for new oil and gas developments now, whereas a Three Horizons perspective would be to say use the resources you currently have to meet demand now, but use the profits from the fortuitous market conditions you are enjoying to invest in improved battery storage and building renewables capacity in order to be part of Horizon 3, rather than trying to perpetuate H1 for as long as possible, practising what Alex Steffen has identified as predatory delay.
And here is the challenge for solicitors who work with clients who are using that argument to embark on new oil and gas developments (in spite of the IEA’s assertion that no more can be undertaken if we are to have any prospect of holding global temperature increases to below 1.5°C): can you have a Three Horizons conversation with those clients? Are you prepared to say we think this will cause foreseeable material adverse harm to many, many people. We want to work with you on developing your renewables practice, but we are not comfortable working on something we know will have devastating consequences. And what will you do if you choose to take on that mandate then several of your staff express a desire not to work on that matter because they do not think it is right to do so?
(To be clear, this isn’t to say that every oil and gas major and bank that funds them should be dropped immediately. If they appear to have a genuine transition plan to zero carbon and are clearly making attempts to deliver on it, then that could be the sort of H1 activity that remains appropriate in the immediate future – and may even become H2 and H3 activity over time. That, in fact, would be a client worth fighting hard to act for).
Turning again to the challenges within Horizon 2, activities which fall within this horizon might be intended as steppingstones to Horizon 3 but may not turn out to be so. An example of this is corporate social responsibility. The original intent behind this was to persuade business to acknowledge that its actions had impacts on its stakeholders and that it was appropriate to take this into account. It was successful to a degree in that most large businesses (and many small ones) sought to identify certain activities they could undertake which would demonstrate their corporate social responsibility. However, whereas the underlying intent was to make CSR an integral part of business culture, it instead became a sub-set of branding and communications for business: not a sword forcing business to change, but a shield enabling it to continue with business as usual behind the appearance of showing it cared (when convenient and/or beneficial to do so). A case of something that could have been H2+ turning out as H2-.
The same happened with social value, which was originally conceived as an attempt to level the playing field for social enterprises in public procurement. Instead, it turned into another way the well-resourced prime contractors could score easy marks, as their procurement teams turned out glossy and persuasive tenders highlighting the extras they were now factoring into their offers, while the social enterprises, scrambling to write their bids in the evenings, found it harder to articulate what was part of who they were and what they did day in day out. H2- again.
It is a pattern which could befall ESG. There is already evidence it is happening in some parts of the financial services markets, with that term and “sustainable” being used to describe funds which in practice are very far from what the average investor might expect them to be. It feels like an opportunity for solicitors and law firms who regard such matters with a Three Horizons lens to have much more nuanced and progressive conversations with clients, becoming deeper relationships, which could offer greater stability to both parties as we progress through increasingly turbulent times.
Of course, to have these conversations with clients, a law firm will have to get its own house in order. This may mean having its own credible zero transition plan, particularly one looking at making deep and swift reductions in relation to Scope 3 emissions (matters like, for instance, reducing year on year emissions related to business travel and client entertainment, once the apparently inevitable post pandemic rebound is out of the way). It may, as intimated above, also mean a more proactive engagement with clients in relation to their activities and their impact, with a view to offering deeper engagement with those on an H2+ and H3 trajectory, but being prepared to walk away from those utterly committed to persisting with H1 and H2-.
One of the intriguing aspects of the alethiometer is that it is in part scientific, but also seems to depend on an intuitive openness on the user’s part to receiving the information it imparts. It involves a willingness to trust in the process, even if all its workings are not apparent, and for the user to influence the outcome by engaging with it, and not merely be a passive recipient. I suspect an element of needing to trust the process without being fully sure of it and to be more proactive without being certain of the outcome of our actions will be required of us all in the coming years (hence the name of the blog).
Three Horizons does feel to me like it could offer some reassuring structure to the decisions we take; to enable conversations with colleagues who maybe feel in different places in terms of engaging with this, without immediately putting them on the defensive; and to provide a means of ongoing review to check whether, over time, our overall efforts are enabling the shift to the future we need, or protracting the current system beyond its utility to us.
I hope that some of the networks[1] that have sprung up in recent years which are looking to use law constructively may engage with the Three Horizons framework and if they do (and I hear of it) I will report back on the results.
[1] Such as GAIL, The Chancery Lane Project, Net Zero Lawyers Alliance, Legal Sustainability Alliance and Lawyers for Net Zero