A new era of environmental law - ThinkHouse Foundations

James Hall: Good morning everyone and welcome to our webinar this morning, a new era for environmental law. This is the first in the series of webinars that we are running this spring in place of our usual in person ThinkHouse foundation events. My name is James Hall and I am one of the co-chairs of ThinkHouse foundations. I have recently taken over from my colleague Emma Bufton and I am an associate in the employment team here at Gowling WLG and as you hopefully know ThinkHouse foundations is our programme aimed at in-house lawyers, the junior end, ranging from trainees and paralegals up to lawyers with around five PQE. And in this series of webinars we have two more webinars coming up, the first is on Brexit which is a panel discussion and that is on Thursday and should give you a really overview of what you need to know a junior lawyer now that we are four months into the post-Brexit world and as I said that is taking place on Thursday. We then have a contract law update which is on Tuesday next week 18 May, and I hope you can attend both of those sessions as well as today's session. If you are unable to join any of those sessions live then they will be recorded so do take a look at those if you can.

So moving on to today's topic. It is a new era for environmental law and as I am sure you can all agree environmental social and corporate or ESG issues are very much in the media spotlight at the moment. We have the COP 26 the United Nations Climate Change Conference taking place in Glasgow in November this year and there have been other recent developments in the area such as the US announcing it is re-joining the Paris Agreement and the plan to slash emissions of greenhouse gases in half by 2030. So I am joined this morning by Sam Cooper, he is an associate in the planning and environment team in London here at Gowling WLG and Sam is going to take you through the basics and highlighted some of the challenges facing our clients and also offer you some practical tips for addressing those challenges and what to be thinking about going forward. Sam is going to be speaking for around 30-35 minutes and then we will have some time for questions at the end and I will look to draw the webinar to a close at around 11:15am.

Sam Cooper: Good morning everyone. Thank you for joining us today, thanks for that James. Yes, as you have heard my name is Sam, I am an associate in the planning environment team here at Gowling WLG. Great to have you all here because I think this is something that is becoming increasingly important but probably is not talked about enough in our work context. You know we here about the environment, climate change a lot in everyday life, when we watch the news and in the pub if you are someone who talks about climate change in the public but that tends to be more just sort of you know what is going on, what has Trump said like "wind turbines cause cancer" that kind of thing. I wish I was joking but that is actually something he said. So the trouble with things like climate change and environment is that it is sometimes difficult to relate directly to business. So this is not going to be a legal update where I am just going to run through recent case law or legislation but rather sort of discuss how environmental law should be considered in the context of work that might come across your desk and just sort of things to bear in mind as you work through.

So I will split this down broadly into environmental risks to consider and how they might have an effect on your business and I will just look at a few recent environmental updates and a couple of examples of new environmental legislation which you should find interesting and particularly if there are any developers watching, this should be particularly useful for you but as I said it is quite pervasive so it should be useful for everyone.

So before I launch into that I just want to have a quick look at the contexts that we are dealing with here specifically so in terms of decarbonisation. I think this is really useful graphic to look at in the first instance because it shows that actually we have reduced our carbon emissions quite significantly since 1990. So it is always nice to know that what you are doing is actually having an effect. But obviously as you can see that is quite a steep decline that we have still got to go there and in terms of achieving this I think this next graphic is really useful. Because apart from showing the scale of the cuts we have already made to carbon emissions I think the difference between sectors is really interesting. Power is clearly leading the way but that is not really surprising, when we think of green initiatives it involves wind, solar, geothermal, tidal we have done the easy bit, there is a reason why those elements have come first. So I think these other big chunks that you can see and whereas a CO2 cuts left to go, errors like transport are much harder to achieve those kind of reductions in carbon emissions and I will be coming onto transport a bit more later on.

So environmental risks, what do we need to consider and what threats might you need to bear in mind? Threats sound quite strong but at the end of the day that is what we are dealing with here and as lawyers risk mitigation is one of our key roles so while you are considering other risks the financial regulatory etc. it is also just worth paying heed to whether any environmental risks as well and that is one thing I would say is a key takeaway from this is bear environmental matters in mind as you work through just as something to always consider.

So as of climate change and environmental litigation this is probably the slightly more extreme end in terms of business based threat but it is picked up in quite a few jurisdictions over the last few years and it has been a little bit slow off the ground in the UK but it is picking up and there are a few key examples that we can look at. The Judicial Review challenges for developments for those not involved in this kind of thing, the Judicial Review is just a review in judge decision made by a public body brought by anyone who can bring a Judicial Review claim if you have standing and in this instance it is planning permissions and development consent orders.

So Heathrow's third runway, I think we have all got a bit of a knowledge on, it has always had a mixed reception but one challenge that was made to that, that was upheld by the Court of Appeal was that ministers did not adequately take into account the governments commitments under the Paris Agreement to combat climate change. Now the government did not then take this to the Supreme Court but Heathrow did and the Supreme Court subsequently ruled that it had been legitimately based on previous and less stringent climate targets at the time it was agreed so the Supreme Court overruled the Court of Appeal in this instance. So while the challenge was not ultimately successful in this instance it is something that I think is going to come through more and more particularly in light of international obligations to combat climate change.

Woodhouse Colliery is another one that you may have seen in the news that has come up, this was going to be Cumbria's first deep coal mine for 30 years. The planning history on this one is a little bit unusual and complex and I will not go into it in huge detail but the plan was initially approved by Cumbria County Council before then being revisited and now there is going to be a public enquiry. So Robert Jenrick the relevant government minister sighted advice from the climate change committee which said the mine would increase emissions and make it hard to stick to government targets. Now obviously we do not yet know whether that development will proceed or not but it is a good example of climate change being at the forefront of a legal challenge.

So those are challenges to decisions made by government but I think we also need to consider private law claims which targets certain businesses. Now historically this has generally been focused on the energy sector so carbon majors, oil and gas companies but now it is slowly creeping into to take in other companies as well. I think it is just worth mentioning that this is very early days for this in the UK but it is picking up quite a lot particularly in the US. One example of that would be the potential for example for shareholder claims to be brought as a result of a failure to factor in climate risk in decision making so that is something that obviously company directors will really need to bear in mind, if it looks increasingly as though their duties will extend possibly beyond the usual obligations to comply with certain regulatory and disclosure requirements. I have also just mentioned green-washing there, because I think it is a fun little buzz phrase but it has come up in the US and essentially just the misrepresentation of one's green credentials, convincing a consumer that something is more environmentally friendly than it is, and litigation based on this has cropped up in the US. But I do not see why it could not hop across the Atlantic at some point and that reinforces the need to provide accurate disclosures when required.

Now I mentioned earlier that I do want to look beyond just the legal points and for this to be quite a general overview of some things to consider here. So I think we need to tackle the potential impact and environmental issues can have on a company's reputation. In the context of public opinions surrounding climate change because I think that has change a lot particularly in the last few years. I think it is fair to say we have reached the stage where the majority of the population views climate change as a major concern as I do not have figures on it but I dare say there is probably some data on it but given the situation I think we have to consider the major factor being essentially the court of public opinion. And in some instances legislation has not necessarily caught up with that.

So I have just picked out a couple of instances I think are worth looking at here as examples. So one being the recent acquittal of the Extinction Rebellion Protestors, I do not know if anyone saw this in the news in the phrase perverse verdict thrown around or jury nullification as it is known in the US, you may be aware of that. So the defendants had no defence in law and yet were acquitted by the jury, with the jury finding that the damage they caused to Shell's building in their protest, Shell in this instance, that was a proportionate response to the damage they alleged was being done to the environment by the company. Now whether one agrees with that interpretation or not, it's certainly an indicator of public opinion and I suggest that the, I believe there is around 1,000 prosecutions lined up for Extinction Rebellion Protestors it certainly brings into question what is going to happen with those.

Segno is quite interesting as an example of action by the public sector, particularly the Ministry of Defence in demonstrating its commitment to combating climate change via the establishment of a new solar farm to mitigate its impact on emissions. For instance I am reliably informed by a friend of mine that a Challenge II Tanker using six of fuel per kilometre off roads so that may go some way to explaining why the MoD considers it important. But I think it is interesting that government departments are doing all they can to demonstrate their commitments to combating climate change.

So looking at those examples we certainly need to consider what our customers and the general public think, the government is held to account and in many ways the public do the same with private companies as I think in my opinion the court of public opinion has extended significantly in the last few years to the point where climate change is among those top concerns and that applies obviously not just to ourselves or any companies that we work for but who we associate with, who we use via procurement chain. So these are just things to bear in mind, I will come onto particular things that we can do shortly but just bearing in mind public perception and who we work with are certainly a good starting point for that.

So in terms of some slightly more practicable points that we can consider. What can we do about these risks? I think they are mostly common sense really, as I said it is a relatively new area of law, relatively new area of risk. So make sure that you are the one flagging these issues because not everyone will be thinking about it. If you have got a concern about a potential environmental risk you need to be flagging those. Considering environmental risk assessments, now whether you incorporate that into existing risk assessment methods or if you have a separate process, I think both are really effective and can certainly pay dividends in the long run. And consider provisions in a contract, so I mentioned procurement before and association and potentials and vicarious reputational damage. I mean there may be environmental requirements that you wish other businesses you work with to adhere to, as I mentioned close associations can be damaging in the court of public opinion so obligations to comply with environmental legislation for example or indeed to meet a higher standard might just help to mitigate that risk.

Disclosure requirements, I think we can all see those changing relatively regularly I think we can see more and more things will need to be more stringent requirements. So getting ahead of the curve I think can save a lot of aggravation in the long run. So accurate data recording is obviously going to be key and as I mentioned green washing is something to avoid. By all means brag about your environmental credentials but they do have to be correct. Adding a climate change to risk assessments now that is thinking is terms of not just in terms of a legislative framework that we have to stick to but also considering the effect actually of climate change and how that could impact your business now that will clearly vary a lot depending on what your business is but as I mentioned earlier there is scope for obligations consider this as part of any decision making process. Accurate disclosures, I think because disclosure also can be a spur to do more oneself but again certainly mitigate compliance and reputational issues. And finally audit applications for consent for projects, take a critical eye to them in anticipation of others doing the same as I mentioned environmental law is certainly quite pervasive and certain in terms of any physical development just be conscious that there will be others looking at it with their environmental hat on so you should do the same.

So just come to a couple of recent environmental law updates here as examples of the kind of things to think about. I will not spend too long on them just because they might be weighted more and more usual for some of you than others but we will start with the environment bill because as you can imagine that is going to be quite important for us. It has been in the offering for quite a while, quite a few things delaying it recently with coronavirus etc. But it does bring in quite a few changes I obviously cannot go through them all but I think these are some of the key ones. Creation of a new office for environmental protection that will be an interesting one to watch because I think it now will have the role of advising government, monitoring implementation of environmental legislation and that applies particularly to local authorities. There is an emphasis in the bill I think on local authorities bearing a lot of responsibility for ensuring compliance.

Biodiversity net gain is a very big one for developers and any of you out there and developers among you will I am sure be aware of this. But essentially any new developments, there are few exceptions but a vast majority of new developments will be required to demonstrate a 10%25 biodiversity net gain, ideally on-site, but where this is not possible there is the possibility of off-site provisions. So I think moving forwards we can expect a lot more green spaces, mini nature reserves and green roofs and green walls and all that kind of thing, bee hives on the roof.

I will come on shortly on to how those are actually going to be secured. In terms of air quality and zero requirement for the setting of legally binding targets for air pollution and similar mechanisms for local authorities to monitor smoke emissions and that kind of thing. So greater powers for local authorities. Subject to consultation I think we will see a lot more limitations on single use plastics, so obviously we have had the carrier bag charges for quite a long time now, I can easily see a situation where that charge is extended to packaging as well as just bags so that is certainly one to consider for any manufacturers that is going to be key. And as you can see the government will have the power to force the recall of cars which fail to meet emission standards but also to set minimum recall requirements. So when a car is recalled it has to be certain number that are actually recalled rather than just issuing a recall notice.

So sticking with biodiversity net gain just for a minute I just want to come onto conservation covenants because they are coming forward primarily as a means of securing bio diversity net gain obligations that I just mentioned. If anyone can remember their land law lectures from university you will be aware of the difficulty of enforcing positive freehold covenants. I am not going to go into that in any detail now obviously because this is environmental law and I do not want the number of people listening to drop off a cliff when I start talking about land law. But these offer a way to secure the delivery of biodiversity enhancement.

So what they do is they secure obligations in respect of certain areas of land that is entered into as a deed as a binding instrument and secure obligations to do or avoid certain activities in relation to certain areas of land. So obviously very important for developers who will need to enter into them but also anyone acquiring land or premises will need to consider these and whether that land might be subject to a conservation covenant. Just as you would with any other covenants or restrictions affecting a property from which you operate or indeed planning conditions and planning obligations as well. If you are operating from a new office building or an industrial unit, if it has been recently constructed obviously looking forward a few years, then that is something that you will need to bear in mind. So then those covenants will then be enforceable by local authorities or other conservation bodies depending who they have been entered into with.

So coming then onto what to expect from future developments I think the key is going to efficiency in construction and buildings. With just bearing in mind that constant 2050 net zero target, if you can make efficiency savings then all to the good and that is I think easier than necessarily finding new solutions, insulation, innovative air conditioning systems and heating systems for sky scrapers and that kind of thing. They are all going to be crucial but as I mentioned at the beginning I think transport is where we are really going to need to put in big changes. You saw how much ground there is to make up in the transport sector so the ban on new diesel and petrol cars will be an interesting one that is in by 2030 we will just keep an eye on that one your guess is as good as mine as to whether electric vehicles continue to be the obvious successor or whether we look more at hydrogen. Again that is one way I think we may all see divides by sector so that one is obviously going to be important for anyone who is running, operating a fleet of vehicles. When do you update to a new fleet that is going to be compliant with new regulations, that is just something to keep a finger on really.

Air quality and particulates, obviously in London we have these low emission zones, I sold my car because of it. But I think they will spread out beyond London really do not be surprised to see them Birmingham, Manchester and major cities as we have come more concerned by air quality. Domestic fuel burning, any of you have a wood burner you may have seen about a recent ban on the burning of domestic coal as a wet or green wood which is great because obviously they release lots of PM 2.5 which is a very fine particulate that we were particularly concerned about from a health point of view. Obviously the concern then was the people are buying kiln dried wood then there is obviously a question over how efficient that is from an energy perspective. But you can see, I think the key for these as well is where is the driver for this coming from obviously we are all aware of the importance of air pollution but when you have instances like this one. This year in fact there was a nine year old girl who had lived very near a main road and had air pollution listed as a cause of death and that is the first time that had happened so I think it is going to be that kind of thing that is going to be the real driver for change and that will bring home to people why these things are important.

I hope this has been a more of a food for thought rather as I said at the beginning I do not want to just reel off changes to environmental legislation because I do not think that is particularly useful to most people because it is quite specialised but I hope this has just encouraged you to keep environmental considerations just in the back of your head throughout and then things might just ping every now and then you think there might actually be an environmental consideration element there. So I hope I have demonstrated how pervasive this issue is and that it does go across all sectors and it is not just one for tree huggers and property lawyers and we do all need to bear these things in mind. So every now and then just whatever you are working on you can just stop take a condor moment and just think about whether there is any environmental element that you need to take forward and as I said earlier on you may well be the only person who is thinking about this. So that was me I think James has been keeping an eye on questions, if you do not want to put it on here obviously I am more than happy to pick up with you directly, there is my details or you can find me on the website but yes is there any questions James?

James: Thanks Sam, yes that was really interesting, very thought provoking some really good points there. We have had a couple of questions through but also if you do have a question please do send it through. I am going to give you a chance to catch your breath Sam. So one of the questions, it may be a tricky one to answer but sometimes they are the best ones. But do you have any idea how likely we are to hit net zero by 2050?

Sam: I wish I could tell you. I think at this stage it is entirely dependent on technology I think, I think there is willing obviously in government and I think as I have said we have reached a point where environment and climate change is sufficiently important to everyone in the population that it is just a given, no party will ever be elected without a strong plan to reach that target. As with everything it is with very long term government targets there is obviously a difficultly with holding governments to account for making commitments that are that far ahead. So as I said I think the political willing is there and always will be but as with everything there is just that balance between what is actually realistic based on economic reality and technology and what there is actually a willing for.

James: OK great thank you. I guess linking to that question as well you touched on it a bit earlier about electric cars and things like that but it was striking to see how much work there is still to do in transport. Do you have any other thoughts on, apart from the obvious we are all going to be driving Tesla's or similar?

Sam: Yes as I said I think that is going to be a really interesting one to watch and I had mentioned very briefly sector divides in terms of transport obviously everything at the moment is dominated by fossil fuels but I think we will increasingly see different renewable alternatives for different sectors. So electric cars may well be the most appropriate for private transport but we have seen a lot of advancements in hydrogen technology over the last few years that I think are going to be really important for freight where obviously people travelling over longer journeys you cannot stop and recharge all the time so hydrogen is going to be I think personally I think is going to be really important and I think there is a German company now developing a hydrogen sludge for want of a better word, it is going to much more easier to transport so I think it is very much watch this space and hope that technology catches up soon.

James: Great OK, interesting stuff. We have had another more specific question which is going back to the covenants point that you mentioned and you touched on maybe there is an opportunity for landowners and developers to engage on that. Do you have any more to say on that?

Sam: Yes I think it is an interesting one because I think there is obviously that, if you are building a new office block in the middle of a city it is going to be incredibly hard to demonstrate a 10%25 net gain in biodiversity on that site. If you are replacing an existing office block, I mentioned green walls and roofs and things like that but sometimes it is just not going to be achievable on site. So if we looked at offsite provision I think there has got to be a role for someone somewhere and this is just my take on it, my speculation of it, there has got to be a role for someone to link up those two bodies, the developers and the people with land, with space that has the potential to actually achieve that overall 10%25 biodiversity net gain. So that will probably I dare say, there will be existing companies picking up that up but there may well be scope for someone to specialise in that I think.

James: OK, interesting. We have had another question which you may have covered so feel free to repeat some of the things you have said but I think it is helpful just to, and I think we will probably finish on this question as well because we are running out time. It is your thoughts on what the top tips are that you can give really for in-house lawyers to be getting ahead in ensuring that they can be as prepared as possible for future obligations that might arise in the area such as regulatory reporting which I know you have touched on. I know you have mentioned having that condor moment and thinking about environmental issues whenever you are dealing with broader issues but is there anything you would advise that anyone can be doing now as it were to get ahead?

Sam: I think just try and maintain a reasonable level of awareness. I am not suggesting that everyone becomes an expert in environmental legislation but I think it is just worth keeping in mind, following legal updates I think is obviously a good option we put out quite a few. I do not really know what I can say beyond that really just try and keep on top of it as another issue, try and treat it as important as if it is as important as it is and financial as any other…

James: Health and Safety.

Sam: ….regulatory risk. Yes, exactly health and safety is a really good example.

James: Great OK, thanks Sam. Well OK that is great well thanks everyone for your questions and if we have not had a chance to get to them then we will certainly follow up with you after the webinar. So I would just like to say thanks again for joining and thank you to Sam and as I mentioned please do join us on Thursday for our Brexit panel discussion and then on Tuesday next week for the contract law update. If you do have time to fill in that feedback form just after the session then that it is great but otherwise yes thank you very much for watching and I hope you have a great rest of the day.