In November 2021 the UK will host COP26, the UN's international climate summit. More than 190 world leaders will arrive in Scotland, along with tens of thousands of negotiators, government representatives, businesses and citizens, with the aim of reaching agreements on how to tackle climate change globally. A significant number of wide ranging topics will be negotiated at COP26, so Ben Stansfield highlights key issues in-house counsel should look out for during the summit.
Transcript
Michael Luckman: Well good morning everyone and welcome. I think we can tell from the dark mornings that just seem to have crashed in and the damp yellowing leaves falling from the trees that autumn is here. It is certainly feeling colder in our house and I can think of nothing nicer than cupping my hands around a nice warming perhaps global warming ThinkHouse webinar. Yes we are still presenting to you on line and not in person. Our audience polls continue to show that the majority of you are finding the webinar format convenient, time and efficient safe and flexible. Our webinars are also recorded and downloadable and so can be accessed via our website.
In addition it is also means that as an organisation we are not creating a reason for ourselves or any of you to add to our respective carbon footprints. We will continue to reflect on whether, when and how the warmth of human company outweighs these priorities.
In this autumn series, we have already considered changes in the competitive law environment and this afternoon we are putting a commercial lawyer and a litigator in the ring together to fight it out for bragging rights on good drafting and legal solutions. This webinar's topic is for UN's upcoming international climate change summit CPP26 which comes to Glasgow in November and what this means for businesses and the counsel that need to advise them.
Some housekeeping first. We expect this session to last about 45 minutes and it will be in a curated Q&A format. If you have any questions, please send them in by using the Q&A button at the bottom of your screen. Depending on the number and content, I will weave them in live or at the end and if we run out of time, we will ensure that every unanswered question gets a written answer. As I have said the webinar is being recorded and we will share a link with everyone after the event if you want to review is or pass it around your colleagues. As always we will be asking for your valuable feedback on how we do.
So come November more than 190 world leaders along with an entourage of tens of thousands of negotiators, Government representatives, businesses and citizens will descend on Glasgow with the aim of reaching agreement on how to tackle climate change across the globe. This will be the biggest event, climate event since COP21 in Paris six years ago, and a number of wide ranging topics will be negotiated. There will be something for everyone.
Genuine concern, when changing electorate priorities mean that many leaders are keen to stress the importance of these debates. Our own prime minister, Boris Johnson, has said as host and I quote "that securing a brighter future for our children and future generations requires countries to take urgent action at home and abroad to turn the tide on climate change. It is with ambition, courage and collaboration as we approach the crucial COP26 summit in the UK that we can cease this moment together so we can recover cleaner, rebuild greener and restore our planet. Failure to address the issue of climate change and caring for the plant will have catastrophic consequences for our civilisation." News headline give us pictures of rising sea waters, polluted oceans, desertification, poor soil quality and mass extinctions. But hope springs eternal in the human breast, environmental awareness has never been so high and whilst we have to adapt to some irreversible effects there seems to be a will across the globe to change tack. Ben Stansfield, you are one of our partners specialising in environmental issues, not only do you advise clients on environmental risk and liabilities and the increasing environmental compliance agenda, you also keep our own business do you not on the straight and narrow in this space. Can we please if I may start with some basics? I spent ages wondering why COP26 was actually in 2021 so can you help me? What is COP26? What does COP actually mean?
Ben Stansfield: Well I guess COP gives us the opportunity to make lots of bad puns when lawyers are attending briefings, and after COP26 we may well see headlines talking about "COP out" or during the session tune in, out all that kind of stuff so anyone as you said Michael it is an international climate summit and is going to be held in Glasgow in the first two weeks in November and it is under the banner of the United Nations. The UK is present of COP26 so we have done most of the organisation and actually we are co-hosting with Italy which for my sins, I only put two and two together a couple of weeks ago so the Italians are involved and there is a currently a pre-COP session over the next few days in Milan.
As you said, 190 countries are expected to attend. I understand the Australia prime minister is still working out whether he is going to come but I think most world leaders will turn up for the set pieces at the beginning and possibly at the end. Covid-19 I guess will reduce some of those numbers but I still think we are looking at tens of thousands of delegates. As to why it is called COP, so the Governments that are attending they signed the United Nations Framework Convention on Climate Change so the UNFCCC. That was back in 1994 and this is the 26th conference of the parties - COP.
Michael: Thank you very much. Is it really a big deal or is a political side show? I mean what will really happen at COP26?
Ben: It really is a big deal. It was due to happen last year but it was cancelled because of the pandemic and I think for many of us greenies that has really heightened the anticipation. Something we have been talking about for quite some time, being looking forward to it. With the Government and we environmentalists like more buzz, more headlines by now? I think we probably would. I suppose I am surprised that it has not yet really hit the media cycle yes. I guess, I am sure Brexit and Covid-19 have diluted the impact and no doubt the current petrol crisis is the current focus, but the buzz has started. Greta Thunberg hit the news the other day at a pre-COP event for the young folk. She said that all global leaders say the same thing. So she said "build back better blah, blah, blah" and that was the story, so hopefully Greta has fired the starting gun for it.
Is it going to be a big COP, these conferences of the parties happen every year but the last really big COP was in Paris COP21. I think that was 2015 yes because last year was cancelled and you will remember that one of the big issues of Donald Trump's presidency in the States was will he ratify the Paris agreement so the Paris agreement which has become seared on our brains. You know it is a really big deal and COP26 will be on that same scale. We will almost certainly be talking about the Glasgow agreement or the Glasgow accords in years to come.
So why is it a big COP? Well the Paris agreement said that nations had to do a number of things. First of all they had to reduce the amount of greenhouse gases produced and increase renewable energy so you know increase winds solar waves. Importantly, the Paris agreement said you have got to keep global temperature increase well below 2 degrees and try to limit to 1.5 degrees against pre-industrial levels and that is the target, that is the goal and we might come on to it a little bit later but certainly one of the themes of CO26 will be to limit to 1.5 degrees, we do not talk about 2 degrees any more. It is 1.5.
The Paris agreement also said that parties had to review progress every five years so this is this year. It is the fifth COP so that is why it is going to be a big thing. And then finally COP21 Paris said that that Governments around the world had to spend $100 billion a year in climate finance to help poorer countries by 2020. I think we are struggling as a global community there. I think we are up to about $80 billion so there is more to be done. And since Paris, the countries around the world have prepared what is called NDCs. They are Nationally Determined Contributions. In other words, that is a plan that sets out how they are going to cut carbon and make their contributions cutting emissions. There are 191 signatories for Paris but yet have 192 NDCs which have been submitted, Eritrea submitted their NDC notwithstanding they were not a party to Paris but had not ratified it and what is important here is that the UN published what they call a synthesis report. That was published last week or maybe the week before, 17 September with the UNFCCC published the synthesis report and that is going to be a huge topic of conversation in Glasgow so in that report. It is a pretty dense read but potentially they are saying we are expecting peak emissions just before 2030 if we continue this trajectory. That is going to be 16% higher the emissions in 2030 than in 2010 so we are still going up. Now if we are to get to a 2 degree increase we need emissions in 2030 25% lower, quite a drop and get to net zero by 2070. If we want to hit 1.5 degrees and I will tell you this is important in a minute we need emissions to be 45% lower in 2030 than in 2010 and we need to get to net zero by 2050. So essentially the UNFCCC concluded there is an urgent need for a significant increase in the level of ambition in those Nationally Determined Contributions between now and 2030, it is the decade of action so in Glasgow there is going to be some real arm twisting and saying look a bit like when you have done your chemistry homework, not bad but you have got to try a little harder if you want to do well in your exams.
What is 2 degrees increase in average temperature mean? Well it means that our coral reefs are going to be destroyed. It means the arctic ice is going to melt once every ten years which is going to be catastrophic for wildlife. It means that sea level rises of a couple of metres, several metres are likely. Bearing mind 60% of the world's population lives within 100 kilometres of the coast, so when those sea levels go up that is catastrophic. We are going to be still looking at food and water shortages. We are going to be looking at migration as you said desertification species, extinction, extreme heat events, forest fires, storms. It is going to be grim but let us not make it as bad as it really could be. So COP26 is a big deal? Yes. John Kerry who is the US climate envoy said it is the last best chance to avert environmental disaster. We are going to get, hopefully, through some really powerful messages from global leaders and I am fairly sure the prime minister will be there waving the flag for the UK and making some statements too. So yes it is exciting. It is a really big deal.
Michael: So with this focus on asking individual countries just to take on a bigger role for themselves, what has the UK being doing in the run up to COP26? So to what extent do we have our own environmental house in order? Are we a good role model?
Ben: We are as much as it pains me to be proud of the UK at the moment, we have done a really good job. A couple of years ago, one of Theresa May's final acts was to legislate to net zero by 2050. We were the first country in the world to that. That is a source of pride. We declared I think the in the same week Westminster Code of Climate Emergency after a result of a Labour Party motion so on both sides of the house we get it which is grand.
Lots of headlines around the world when we did that. I guess after that not much happened and that was a little bit frustrating. We had some really good set speeches being made. We had a white paper but there weren't any answers so no real blue prints or green prints about how we are going to get there. We looked over to the EU and we saw that they had produced their road map for their green deal, and so when we are speaking to clients we say well this is how we think it is going to go, but we are not quite sure what the exact policy will be but what they are doing in other countries, what they are doing in the EU is X, Y and Z and so you get a pretty good understanding of where things are likely to go, some really good reports from the committee on climate change too.
So we were busy and I get that and Brexit was all consuming for politicians. We had the pandemic so it is entirely understandable that our eyes have been taken off the green ball a little but COP26 is a great opportunity to get things moving again. I suppose I would say if I was being a little bit mean that in terms of green announcements this year it has been a bit quiet so whether that means we are going to get some big announcements in the autumn around COP26 that is probably like and what are we hoping for? So the Environment Bill was introduced to Parliament in 2019 been around a long time. It has really made slow progress. I really hope that will get royal assent this autumn and that is really important because in there, there is some really good stuff about air quality and water, fabulous stuff about biodiversity next game which says that all new developments, developers must increase biodiversity as a result of this by 10% minimum. So that is grand. We are going to get a new environmental regulator, the office of environmental protection some really exciting stuff in there but I think we do need.
I am fairly certain. I am surprised we have not had it yet but I am fairly certain in the next few weeks around COP we will have a net zero road map that we have been waiting for that for a while and that is going to tell us how the UK, what the route to the new green economy is going to look like.
I suppose the excitable environmentalist in me is hoping for even more whether it comes from the prime minister or whether it comes from others as well, so are we going to get things like minimum renewable energy mandate so all energy must come from renewables by this date. Some countries are doing that so might we? There is some exiting stuff I guess that could happen around agricultural. Proper pricing of meat and dairy to reflect its environmental impact. We could do so much more globally with that land so instead of growing crops for livestock, we could go crops for the hungry. That would be pretty call. We could re-wild nature, we could use that for capturing carbon and keeping it in the soil releasing carbon when we plough. We could look at carbon pricing with greater vigour, we could introduce new sectors so the EU are taking about bringing commercial property into carbon trade. That might be something that gets looked at more closely. Coal closures is going to be a big one. The UK has gone without coal fired power generation for some time but in this cycle, we have turned our coal fired power stations back on which is necessary. We had to do it but that was a shame but so you know coal might be something that we perhaps be a little bit bolder on.
Michael: I am glad you have mentioned puns because there are plenty around and of course easy to determine whether it is going to be a good COP or a bad COP if I can put like that - see what I did there!? But I do understand whether the Cop does actually address different themes each year and it tries to make itself current and keep up with the scientific advancements and political debate so what are going to be the main themes do you think this year?
Ben: So COP26 you know under the president of the UK Alok Sharma has taken the reigns and there are four goals that have been set and I will tell you what they are and then go into a bit more detail so the first goal is securing global net zero by mid-century. Slightly frustrating it has not said 2050, you know mid-century I guess is 2050 but for some it could come five years sooner, five years later so they are being a little bit vague there and keeping 1.5 degrees within reach, that is really important. That is goal 1. The second goal is adaptation so to protect communities and natural habitats. Goal three, a really important one mobilise finance and I suspect even though it is goal three it will actually be pushed higher and fourth one is a bit weird, it is about working together. So how is that going to be achieved? Well OK first on net zero by mid-century countries are going to, obviously they have submitted their NDCs but the Paris agreement was not, the targets were not as ambitious as they have been and there have been some reports admittedly 18 months old now, we would say actually we are probably on course for more like three degrees unless we sharpen or pencil a little bit so ambitious targets for 2030 are being asked for. It is not like revising for an exam where ideally you could be doing a little bit every night. My daughter's has her GCSEs net summer. We were told she needs to do 45 minutes of revision every night. Now black in my day, you just worked all night the night before an exam and you crammed and you did it that way and the carbon environment is not like that. You cannot just cram in 2049. You have got to be taking steps now if we are to hit that target.
So COP26 is saying look we have got to accelerate and phase out of coal. We have got to curtail deforestation. We do not talk about reforestation but stopping deforestation. We have got to speed up the switch to electric vehicles and we have to encourage investment in manure. So really good stuff in there but nothing that we might not have predicted.
The second goal so that is adaptation so protecting communities and natural habitat. This one is a really important one for me actually because there is such a focus right now on decarbonisation. We talk about carbon, we talk about emission, we talk about greenhouse gases and if you look at the prime minister, he published a paper last year. I think is the ten point plan for a green industrial revolution to create 250,000 jobs that was published last year it is all about and I get it, it is all about building or creating 21st century versions of what we needed in the 19th and 20th century, steam power and new infrastructure. Only one of those plans was about improving the environment, about making national parks bigger and such like. Improving natural habitat, rewilding, reforestation, protecting and restoration of eco is really important and I kind of feel that that is being the poorer cousin for the environment for a long time and I am hoping that COP26 again really gets that going, but within that category, within that goal we have also got building flood defences, making ourselves more resilient, greater warning systems, looking at agriculture, how we can avoid loss and damage to homes, livestock and light as well so that is an adaptation of habitats.
The third is about finance. You know this is not going to be cheap right. You know this is going to be really expensive so the UN is wanting to mobilise and what it is saying is look developed countries have got to make good on their promise to mobilise at least $100 billion of climate plans per year and that will unlock trillions of dollars from the private sector. So a real focus on making international financial institutions to play their part. Work together to unleash these trillions of finances and Mark Carney, remember him, our former Bank of England governor, he is very good when he was at the Bank of England. He got climate, he got the risks to institutions and the economy so he is advising the prime minister on these mechanisms and all of our large lenders, investors, funders, they get it. It feels to me like that is pushing an open do, obviously not to do but it is positive stuff.
Working together that is the fourth goal. It is a little bit wishy washy but COP26 tells us that we can only get there if we work together so we need to accelerate actions that tackle this climate change crisis by greater collaboration through the Government, businesses and society so I think that fairly predicable but you know clearly important.
Michael: My first observation about all that stuff is it is all very important but it all sounds pretty high level. It almost sounds at a Governmental level and all sounds like global action, pulling together all that kind of stuff. Why is this of interest to individual clients whatever their size?
Ben: Yes I think that is a fair comment. I think it is a UN summit, it is going to be attended by the globe's leaders and NGOs, it has to be at a high level and that will filter down but big businesses will be there, there will be admittedly the large international conglomerates and the investors but they are all really keen to play their part in shaping this green economy and I think as I says Covid will probably impact numbers but I still think we are going to see a lot of business folk at the summit.
So is business taking part? Well I guess they want a green halo effect. Gordon Geko told is in the 80s that greed is bad and Boris is telling us in 2020s that green is good. Stakeholders really care about that and that is a theme I have probably talked about in previous webinars but your lenders, your customers, your employees all these kind of stuff. I really do not like putting people into categories but you know if you speak to millennials and the younger generation really care about environment and in 10/15 years' time, they are our leaders, they are our customers. The green pound is really important, if you want to know how you're performing in business go and ask your grads. They will tell you. They want to work for a green sustainable businesses that are doing the right thing so do not ask me how Gowling is doing, speak to the grads to see what they think. So yes becoming an employer of choice, I think that is a big driver for businesses in taking part in the COP.
COP26 is ultimately going to shape consumer behaviour or rather the outcomes of it will so you know again research tells us that green products command opinion. Green businesses are super hot right now. There are some reports recently about plant based business and vegan cosmetics and staff being worth £50 billion as an industry in a few years' time. It has just rocketed. A lot of business rightly are alive to that. They want to take people with them and they want to shape their market. COP26 sets this as global policy. That then filtered down to national Government policy. That then gets translated into regulation or businesses either comply with regulation or they lift it and so again business is there to understand what regulation is going to look like in a few years' time. Their understanding from directional travel. You know why wait two years for the regulation in relation to renewable use or low carbon materials. Just do it now so I think there is a lot of that in there and that is why they want him to go along. It gives us the opportunity to see round corners to see what is coming up. Without private finance, without funders, without business this just does not fly. Green finances we have seen is a key goal for COP26 and it is going to turbo charge big finance and I guess because we come back to your introduction Michael that every business in every sector in every jurisdiction has an environmental impact so change is going to come for us all.
Michael: Thank you Ben. Climate change is obviously a risk of course you have made that abundantly clear and perhaps not a risk but almost a certainty so what are the opportunities here. Is it all doom and gloom or are there reasons to be optimistic and in this context we have had a question come in from Tony who is asking about the United Nations sustainable development goals and the extent to which they play a role in helping us avoid climate change getting beyond the point of no return.
Ben: Yes climate change is a risk. It is scary. It is horrible and it is going to be pretty unpleasant for lots of folk and so I do not want to belittle and say it is going to be OK but yes you are right there is an opportunity and Boris will talk about his green industrial revolution and I think that is a good way to think about it and the speed of change is going to be quite phenomenal, it is quite exciting. I have been an environmental lawyer for 20 years and it has been OK. It is only now that my daughter thinks that what I do is quite cool. So it is a good time to be alive. It is a good time to be involved in this because and last industrial revolution lasted for 100 years. Ours is going to have to be ten years it is going to be phase 1 and the next 20 years will take us to 2050 so it going to be a really condensed period. There is a lot to do so we are currently at 40 to 45% carbon cuts I guess in the UK. Maybe a little bit higher. The Government wants us to get to 78% cuts by 2035 so a phenomenal pace of change. Really exciting and if the UK gets there quicker than others, we have got technology, we have got skills but we can export, we can help, it is our duty to help developing countries to do the same so it is potentially good for business.
What are the opportunities well I guess we have got, even in the UK we get a third of power generally from wind, a third is from imports from nuclear, from solar biomass and things like that but we still get one third of our power from gas so although the power sector has done phenomenal things since 1990 in terms of decarbonisation we have got a lot more to do. That needs replacing and we need to go really big on storage whether that it is going to be factories, whether it is going to be air compressed air and so forth. In the UK we are banning the sales of new petrol and diesel cars from 2030 which is a huge change. I suspect the last few weeks will speed that up in terms of petrol crisis over fuel crisis but that is a massive change. Not just for manufacturers but all the associates infrastructure. You know the charging networks are going to have to be phenomenal so again that there are opportunities there. COP26 aims to reduce deforestation. I do not think they have been bold enough and really do hope someone starts talking about reforestation, re-wilding, making the wold better. We are going to be have biodiversity going in this country. That is going to spark new industries, new business models. Aviation, shipping, freight they are all going to have to eliminate and reduce emissions so can have new tech solutions.
Decarbonising our homes that is going to be a really big opportunity. Homes and office and commercial properties responsible for 30 to 40% of our carbon emissions I guess. 80% of the buildings you see around us today are going to be here in 2050 so these are the buildings we are going to have to deal with and get to net zero by 2050. Lots of retro-fitting, totally have to rethink the way we heat and the way we cool our homes or our offices so again there are going to be lots of businesses, lots of industry, lots of opportunities cropping up around there and new businesses in their entirety. Seaweed farms is one I read about recently so seaweed and seagrasses generally are really good at sequestering carbon. 80% of the carbon emissions apparently are sequestered within plant and vegetation in water so you know some clever folk will start creating seaweed farms. They will be creating carbon credits which they will sell into the market. There is going to be business opportunities and low carbon material, I was reading about roof tiles that can purify the air. Smog eating buildings, you know buildings with a sort of new cladding that can absorb toxic air pollution so some really exciting stuff there.
Question about the UN sustainable goals. Yes you know we are seeing again more and more clients signing up to those and Gowling you know we have signed up to them as well so some very powerful objectives within them which require businesses to take really positive steps to include the environment. I guess it is more of an ESG type principle as well but some very powerful stuff in there about environment and resources and so forth which sends a very clear message to stakeholders and employees and all that kind of stuff about how businesses are going to pay. Again after COP26 there will be greater interest. More and more businesses wanting to sign up and make this public commitments that they are not just going to do what they think is a good thing. They are going to be more objective goals as well.
Michael: Very interesting. A question that has come up is that perhaps some of the actions are currently inconsistent with that. The particular issue has come up in relation to West Cumbrian mining which is a new coal mining organisation permitted by the Secretary of State. How does that fit? Is that an aberration or is it a short term thing or is there some justification for that that you are aware of. I am conscious it is a specific issue.
Ben: Yes speaking, OK so my more measured response is to say that certain industries still need coke and what have you so the steel industry still needs that. So I think that is the justification for it speaking as an environmentalist I don't think you can in the one hand be standing up in Glasgow saying no more coal fires power stations across the wold you know China last week or the weeks before saying we are not going to finance coal fired power stations in other countries which has a really positive impact for the climate in Indonesia and South East Asia and then to be permitting anything to do with coal in the UK I think is baffling whether that project ultimately goes I don't know enough about it but my sense is that public opinion is just so strongly against it. It is a bit like fracking that the UK Government or previous Governments have said yes fracking we will look into it and the good folk of Surrey and affected communities they lay down in the road and stopped it so would that project go ahead I think just cannot begin to imagine it will.
Michael: I think you are beginning to see how it plays into individual businesses a bit and the opportunities that might be out there. Also the risk management point of view from a compliance point of view and the sort of customer pressure that businesses might come under if they are not green but what is the role of in-house lawyers in all of this? Why do they need to worry about it?
Ben: Yes so well I guess any day now that COP26 media cycle is going to start to begin. We are going to get a lot of Government announcements a lot of publicity about some new green initiatives and the environment is going to be on the front page of press for good reasons not just because of Insulation UK trying to bring chaos to the M25 so I think you know this new policy of stories and I think businesses are probably going to start to feel a lot pressure to talk about their own environmental performance. You know now just during COP but afterwards so I think the green dial is going to move quite significantly in the coming months and businesses need to be able to talk about the impacts they have on the environment so not just to the usual stuff about how much power you are using, where are you to get your lightbulbs from, what kind of paper. What other resources are you using? How much water are you using? How much palm oil is in your supply chain if you are in food and drink? How many electrical vehicles have you got in your fleet? What are you doing about rarer minerals all of that kind of stuff. So you have got to be able to talk confidently about the impacts you have on the environment. You know increasingly you need to be able to talk about the impact the climate change has for your business. You know where do you do business? Which of your manufacturing clients are vulnerable to flooding? How are you reducing the effects of storms on your operations and then thirdly and again my hobby horse, what are you doing to make the planet better?
Are you rewilding, are you improving biodiversity so some businesses are going to start making some silly and rash claims, announce now and work out the detail later. We can do net zero by next week or whatever. Obviously most of our clients, all of our clients feel much more considered with that but in-house lawyers they are kind of at the heart I think of promises which are made publicly by businesses. They manage risk and climate change. You know let's not be in any doubt it is a huger risk but it is the opportunity as well but I think in-house lawyers they talk about some practical type stuff but they need to understand obviously how climate change affects the business and their business impacts the environment and that taker auditing.
In-house lawyers need to be able to know how, like a watchdog they need to know how to share that information with the outside community. For some of our large clients reporting is beginning to become mandatory but others it is voluntary but no doubt that is going to proliferate. Your environmental statements are really, really critical and NGOs are going to read them. They are going to hold your feet to the fire and if you are saying the wrong things i.e. you are not ticking those regulatory boxes in terms of reporting there is going to be all sorts of problems. If you are saying too much the problems are just as big, it is just at different ends of the scale. There will be climate change litigation stemming from your disclosures so shareholders, activists, NGOs have increasingly more standing, the courts have been quite liberal in this respect and they are going to ensure that you are not just meeting regulations but you are exceeding it in certain businesses. So I think finding the role of the GC or the in-house lawyer, you know in-house lawyers are excellent at bringing together all those different strands of the business aren't they so they pull the sales team in, the finance, the HR, it has kind of got fingers in each pie and I think that is going to be critical if you are going to be credible as a business in reporting about your environment.
Michael: I have a specific question here around TCFD and whether you think that kind of reporting will become mandatory?
Ben: Yes it will. Mark Carney has been beating that drum quite loudly for a whole. I think it is not just going to be in relation to you know climate impact you know financial disclosure in relation to the climate, I think it is going to be nature based reporting as well so that is quite exciting. So they were I guess an effected company gold standard and we have already seen financial regulations getting behind there and the idea of the standardised reporting generally is to give this proper information to invest in those businesses with the business reporting so it is about consistent disclosure and maybe need to compare I guess apples and pears so yes I think that is likely to increase and it is great because it is meant to be a global sale because you see so for example in the UK steam lined engine carbon reports SLECR does not apply to everyone, it is quite prescriptive but it is our jurisdiction only so a multi-national is not having to report on the same thing elsewhere so having consistent global reporting is going to be really good.
Michael: So just down to some practical matters, what do you think in-house lawyers should be doing now about COP and about climate issues?
Ben: Yes so probably a list here. If we start at auditing, and again apologises as I'm teaching grandmother to suck eggs but it is about understanding your base line. What does today look like? Getting evidence and being really thorough in those auditing, and looking down your supply chain because it is very easy with a supply claim to be pushing your environmental impacts to other countries right. So if your supply chain is overseas, then that's where the resource issues are. The NGOs and the environmentalists are very alive to that so look at your supply chain really closely. As I said a minute ago look at your resources really closely as well so not just paper and power, that's a given, but how much water do you need, what are the options for air cooling for example, that kind of stuff. Are you offsetting your carbon emissions or are you genuinely trying to reduce because it is easy to write a cheque for a few thousand pounds and say that is carbon emissions sorted out but actually it is not good enough. You need to look at how you can properly reduce it. Again on auditing look at your environmental management systems, are they robust, are they internationally recognised as being reliable, fundable? Do they give you the data that you need to look your stakeholders in the eye and tell them what you're doing, so I think that is sort of auditing and I cannot stress how critical that is. In terms of disclosure think about how you are communicating your environmental story to your employees. Again what do your grads think about it, they are going to tell you the truth. Are you reporting on a mandatory basis? There is a real proliferation about reporting. We have got new laws coming in in relation to rain forest commodities so if you are a big business and you are using palm oil or you are using beef, or you are using the leather, rubber, any of the crops that are traditionally grown where rain forest is chopped down, there are new requirements or big businesses to go out there and really do proper due diligence and work out am I using those rainforest commodities, where are they coming from, are they properly sustainable, if they are not, what are you going to do about it and again it starts at the top but soon everyone is doing it on a voluntary basis and then we start to move to something else so the more information you can get about your operations the better.
If you are not reporting, there are obviously legal consequences for that but the bigger issue I think is probably going to be what are people saying about you for not properly disclosing.
So that is auditing, that is disclosure, working with your peers. You know what are your competitors doing? Is there an industry approach or an industry expanding or merging? How can you shape that with your peers and competitors and I guess the other big one about internal education. Are you educating your board on environmental issues on ESG matters? Do they know how to speak credibly on this issue? Can they articulate the policies? You know, do they have the detail? If your leadership team, your CEO has been making announcements about the environment you know what was said, who is owning internally the responsibility for checking that those targets are being met, that they achievable? Obviously if nothing has been said on environment, why not? Make sure something is announced too and are you making sure your colleagues are aware of the green finance products? It is really going to kick off up to COP26 and green finance products are already coming to the fore an often there is cheaper finance available. If you are going to use those funds for environmental purposes or using the sustainable materials in your development and so forth. Again in-house lawyers need to be really aware of green washing so you know those pesky sales folk are going to say what they need to do wherever they think they can in order to market that product as a green product. They are going to badge stuff as sustainable, they are going to badge it as low in carbon, butterfly friendly, whatever they need to say, to put that sticker on that product, they can think about so again you are the regulator internally you make sure that all those green commitments that you are making are legitimate because again we are seeing companies take businesses to task for being a little bit too bold in some of their claims and then finally, where are the improvements that can be made, what are the easy wins? It is human nature to worry about risks and where most of us are lawyers on this call so we are prone to worrying but yes there is an opportunity so who is looking at that within your business. Are the low hanging fruits being taken?
Michael: We are at the end of the formal part of the webinar. I have got three questions that I would like to put to you for those of you who feel able to stay on for a bit longer and I hope that will be most of you. I think the first question relates to actually from a Government lawyer who acknowledges obviously that the Government has got procurement obligations under social value requirement for procurement and up to at 10% or more needs to go towards the social value objective of course and climate change fighting climate change is one of potentially seven objectives that the Government can reach so we could see Government setting climate change objectives in terms of scoring and evaluation as part of the procurement process. Do you think that in-house lawyers in private practice would have an opportunity to leverage a similar approach?
Ben: How do you in...
Michael: Requiring their procurement policy to set down strong environmental standards such as PAS2060 accreditation or something.
Ben: We are certainly seeing as a business greater interest in what we are doing as a business on the environment so we seeing the score that was given for our environmental performance much more. We scored more highly and certainly as a business we are procuring in greener ways, but undoubtedly there is scope for improvements.
Michael: I think the question was the extent to which I think you might see private sector organisations off the back of legal advice or with in-house lawyer supporting setting rules for procurement of services or equipment which sets as entry criteria effectively climate standards.
Ben: Undoubtedly and I sorry I though the question was moving in a slightly different place which I think is also do lawyers in public sector have an ability to it in a different way because we do focus on business work but actually it is the public sector which is, as far as I can see, making it slightly more vocal about the environment and so where they go, commercial clients will follow so apologies if I sort of focused on commercial sectors but actually it is the in-house lawyers in the public sector which can make even greater contributions to this debate and hold the green gun to you and me Michael and make us do more when that spills over.
Michael: Yes I think for me as a lawyer gets versed in public issues quite a bit. One of the challenges is that there are seven all equally important social value objectives under the public procurement notice and there is a degree of flexibility in choosing which one gets priority on an individual project so I think an interesting discussion in the public sector spaces is the priorities between those social value objectives all of which are important and all of which as suppliers to the Government we ought to be measuring ourselves up towards.
The next question is I think you referenced the 2019 Environment Bill. What do you think is the UK Government's appetite to legislate at the moment especially post COP. Are we going to wait and see or are we going to be charging in on our white horse again?
Ben: Well the first thing is to get the Environment Bill to get royal assent. It was announced in 2018, introduced in 2019. It has taken a very long time to get through for something as important, and it has broad support from both sides. Actually, the House of Lords has held the Government's feet to the fire a little bit more than we expected which is great so clearly we have got to get that one done first before we start thinking about other stuff. It is a bit of a framework legislation so from that Bill, from that Act, we will have dozens of regulations. I think if that is a success, I think the Government might have confidence to say look instead of 10%, it is going to be 15%, it is going to be 20%. You know we have got clients already who are saying we are going to go harder than 10% because it is going to be a great selling point for us and it is the right thing to do and it is a good thing to put in our report which we like. So do I think there is going to be greater appetite for legislation, I really hope so. It would be nice to be able to think about the future rather than dealing with referendum decisions and fuel crises and pandemic and stuff like that but for too long the environment has been the second most important thing to worry about. I think public opinion is not quite ready for it yet. We have seen with the Insulation UK protests that people are not ready to be told they need to insulate their homes but they just want to get to work on time, they want to get to Heathrow Airport so there has got to be an appetite for consumers and the general public to really change their ways. It is well on the way. I do not think that we are quite ready as a community to do that too soon. I think it is going to be baby steps to get there.
Michael: Thank you Ben and the final question, this is from Matt, do you think the necessary interventions are already there to hit targets and that we should just properly invest in them and deliver them or do we need something completely new or is some blue sky research needed to make all the difference?
Ben: It is a tricky one because I think the UK is actually pretty well ahead of the game. I think we generally can say we are a green leader. We have got some great quality measures already. We are going great guns in our carbon emissions because we have got so much ability to put the offshore wind turbines in the sea so we are a world leader there. We get a third of our power from that so we are quite lucky in the UK I think that we can do some of that. We have made big leaps forward so do I think the UK is going to hit its target, yes I think we will actually. So if the question were UK specific do we need to do more, there is always scope for me but actually I think we are in a good place. If it is a global question then I do worry that we are not going to hit those targets. It was frightening to read that the UN think we could be as a high as 3 degrees and 2 degrees is horrendous, 1.5 is bad, 3 degrees is off the scale, scary so I do hope there is more intervention. I hope this COP26 is progressive and had ambition given it and I kind of feel the next big COP in 2026, in five years' time, maybe they will try and get back on track and do it in four years' time, 2025 is a big one. A bit late then if we have not hit those targets so I kind of hope I suppose that we keep things under a bit more regular review. I do not like this five yearly cycle. I think it is two years to keep things under more regular observation.
Michael: OK Ben. Well thank you. That has been a really fascinating discussion with you and I think both scared and encouraged us in equal measure. So it just remains for me to say a big thank you to all the audience today for listening and I hope you have found it interesting. Now please remember to, you can download this webinar if you want to share it and please fill in the feedback form and a bit thank you to Ben for your excellent presentation and for being so passionate in yourself and on our behalf actually about a topic of such importance and goodbye everyone.
Ben: Thank you.
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