On 2 October, the market-leading Dentons Environment team delivered its eighth annual Environmental Law Fundamentals training day, aimed at helping businesses evaluate risks in the current regulatory and societal environment. The popular event was a great culmination of the team's "Environmental Law in 2019 and Beyond" series of seminars.
Stephen Shergold began by introducing the audience to the Dentons Climate Change Legal Dashboard, which maps out four key pieces of the climate change jigsaw: (1) the Rule of Law, (2) Impact, (3) Civil Society and (4) The Response.
Before delving into the content of the dashboard, Helen Bowdren opened with a discussion on the impacts of Brexit on environmental law. She set out a post-Brexit roadmap, looking both at UK legislation and policy that is unlikely to be impacted by Brexit, such as the 25 Year Plan and the Net Zero Carbon by 2050 target, and at areas that could be subject to change, such as chemicals regulation, emissions trading and environmental permitting.
Stephen then examined the rule of law and overreach of civil society, opening the session by asking the audience whether they thought additional regulation was more of a hindrance to, rather than an opportunity for, their businesses. The majority of the audience felt that regulation was more of a hindrance. Stephen discussed how the rule of law provided certainty, clarity and consistency, but it was not moving at a quick enough pace to keep up with social and civil movements. Civil society, influenced by a range of factors such as the Blue Planet effect, the Extinction Rebellion movement and reactions to allergen labelling incidents, is taking on the role of regulator. Companies have started actively adapting their business models in response to public opinion; however, there are also dangers and challenges facing businesses in a civil-regulated society. Using the example of ethanol, Stephen explained how the opinion of civil society is very changeable, and could not provide the certainty, clarity and consistency of the rule of law. When asked again at the end of the session, the majority of the audience now saw increased regulation as an opportunity for, rather than a hindrance to, their businesses.
Annabel Hodge and Stephen ran an interactive session on negligence and its growing role in environmental law. Whilst virtually unused in the early 2000s, claims in negligence are now a lot more frequent, in particular those brought by NGOs and groups of claimants. Annabel provided an overview of negligence and its development in environmental law, and Stephen then split the room into "high court judge panels". Using recent key cases as examples, the team asked each panel to determine the factors that would contribute to the creation of a duty of care, in the same way that the actual high court judges had to.
The team then moved on to look at enforcement and civil sanctions from a business, rather than legal, perspective. The team explored, through a number of examples, how enforcement undertakings (EUs) tended to be less financially burdensome than going down the route of prosecution. However, EUs still carried significant risks, in particular acknowledging a degree of culpability for an alleged offence that the Environment Agency could try to use in any later prosecution (if the EU is not accepted and its conditions complied with). Stephen explained that, although choosing which route to go down was more of an art than a science, the advantages of an EU – in particular, financial considerations and the fact that an EU does not result in a criminal record if complied with – often outweighed its risks.
Amy Morin went on to discuss the impacts of adverse weather on commercial contracts, including whether contracts could cope with adverse weather. This is particularly important when considering the impacts of climate change – a "once every 100 years flood" is now likely to happen far more regularly, which can have a significant impact on the foreseeability of risk and force majeure. Contracts will have to learn to deal with far more extreme risks within the realm of foreseeability.
Sam Boileau then looked at the emergence of environmental, social and governance (ESG) due diligence. He compared the environmental law scene in 1999 with that of today – whilst in 1999 there was a broad understanding of environmental issues, the modern day has a much clearer and less forgiving approach to environmental policy matters. Sam set out the three stages of ESG: policy, implementation and operation. Sam then went on to highlight some key areas of environmental law and policy in 2019, including the circular economy, enhanced producer responsibility and increasingly ambitious government carbon targets. He discussed how these areas can translate into corporate policies and the potential challenges facing businesses when implementing such policies.
Finally, Stephen rounded off the day with a wider discussion on the environment and societal agenda for businesses today. He reiterated the importance of sustainable profits and how these can be achieved through an understanding of the impacts and influence that civil society can have.
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