Emma Bufton: Good morning everyone and welcome to our webinar this morning on green supply chains. Now this is number three is a series of webinars podcasts that we have been running over the summer as part of the new series on sustainability focussed ThinkHouse events. Now we have previously had webinars on green recovery post COVID-19 and the impact of environmental issues on international trade and recordings of both of these webinars are available on our website, so do take a look at those when you get a chance.
I am Emma Bufton and I co-chair ThinkHouse Foundations, which is also part of the ThinkHouse programme. ThinkHouse Foundations is aimed at in-house lawyers just starting out in their careers and up to five years PQE. So the topic for today is green supply chains and looking at how we can integrate environmental thinking into supply chains, and I am delighted to be joined this morning by two of our experts in this field. We have Sarah Riding a Partner in our commercial IT and outsourcing team, whose background is in advising on supply chains and she will be walking us through the supply chain life cycle. I am also joined by Ben Stansfield a Partner in our environments team who will be feeling into that from an environmental regulation perspective.
Before I handover to Sarah and Ben a couple of housekeeping points. Firstly if you would like to ask a question then we are using the Q&A function which you will find at the bottom of your screen so just click on that and type in your question and the question will then make its way to us. Sarah and Ben will do their best to deal with as many questions as they can in the time available but I cannot guarantee they are going to be able to get to everything this morning. Secondly this webinar will be recorded and you will be sent an email with the recording so do feel free to share that amongst colleagues. And finally at the end of the webinar there will be a link in your browser to complete a very short feedback questionnaire on the session. So please do take a couple of minutes if you can to fill in that feedback form. We really do use those to shape our future sessions. I will now hand over to Sarah first and she will be kicking things off this morning.
Sarah Riding: Thank you Emma and thank you again all for joining us this morning. I'm really pleased to be talking to you about sustainability and the supply chain. So before COVID there were two huge topics on company agendas, Brexit and sustainability. We were working with many clients to ensure that their supply chains contracts were reflecting their green agendas. Sustainability across supply chains was no longer a public relations opportunity but an integral part of supply chain strategies. A number of factors were also driving this, the bottom line the World Economics Forum published research that sustainable supply chain practices resulted in cost reductions of around 9% to 16%. Organisations also run the risk of being sidelined by competitors if they are not incorporating green practices within their supply chains. Early adopters were seen as gaining competitive advantage. Consumer choice, we recently saw the effect on Boohoo the online fashion retailer, whose shares dropped over night due to stories surrounding their poor supply chain management. So with COVID-19 organisations have obviously been having to take a much more reactive approach. Green initiatives inevitably took a firm step down the agenda but supply chains have remained in focus. So at the start of the pandemic we all obviously saw the supermarket shortages and there has been much more attention on how resilient those supply chains were to meet the crisis. So emerging, or hopefully emerging, from COVID-19 organisations have been much more proactive in addressing in what in many areas are now very fragile supply chains. The focus is on future-proofing and I think the word around supply chains that we are hearing all the time at the moment is "resilience" and making sure that they are resilient going forward. So what we are seeing is where sustainability initiatives had been implemented the supply chains were much stronger in the crisis and were much more transparent. The renewed focus on supply chains therefore creates a window of opportunity which should not be missed on pushing sustainability back on the agenda. So highlighting the increased focus, we have seen several large organisations recently addressing this issue. Last week Apple stated that its aim is to have a carbon neutral supply chain by 2030 focussed on revamping its manufacturing and products lifecycle. These plans include more energy efficient data centres, recycling materials and carbon free aluminium production. So the focus this morning is on each stage of the supply chains and the steps that can be taken to drive improved sustainability.
The various stages of a supply chain offer plenty of opportunity to incorporate green practices. Organisations however really need to be looking holistically across their supply chains when looking at green initiatives. So not only within its own factories or premises, but it needs to be managed end to end across the supply chain. So strategies around sourcing, packaging and transport all have tangible effects on the environment. The strategies are adaptable across virtually any industry so there is always a better way to obtain materials, package goods or ship out to customers for example. So organisations need to think about how these initiatives can be driven through its supplier base and what contractual provisions can be built into supply contracts to ensure that these initiatives are implemented. Whenever you are looking at putting contracts in place with suppliers it should be a key objective to consider if you are making it the best it can be from a green perspective.
So you will see from the slide we have split the supply chain into four stages. The first stage in this is the sourcing and use of materials. We have seen a big increase in the push for organisations to source ethically with a focus on both human and environmental wellbeing. Ben shortly will be talking about the EU green deal and the implications that is having. We're also seeing a push for an increased use of sustainable materials that limit resource depletion and minimise carbon emissions. For example, increased use of bamboo we are seeing that in many more products recently, and linen which are both renewable and require less power to harvest and create. You may have seen that Greenpeace ran its Detox my Fashion campaign which was supported by major brands such as Burberry and Nike.
So many organisations are of course struggling with the COVID crisis and this is causing an increase in some risky behaviour by some suppliers, and obviously things like site audits may have been cancelled. So some of that transparency with suppliers may have been lost recently. It is always important to remember that your supplier's risk is your risk, so you really need to be managing that within your contractual relationships. We see many organisations now implementing a code of conduct in supplier contracts that sets out the key measures that suppliers should adopt. This is more important now to address the risky behaviours I have just mentioned where suppliers may be in much more of 'survival mode'. And this code of conduct can also be used to drive your strategy across your supplier base and include, for example, not only human rights violations but also the need to obtain materials legally and safely and to certify that certain materials and practices are not being done, or to drive other initiatives that you are trying to push out to your suppliers. We have seen this with McDonalds, they are using their scale with their suppliers to try and reduce environmental impact by 2030 and it is committing to a 31% reduction in emissions across its supply chain.
The second stage is manufacturing, so factories and productions themselves. There are lots of key questions to address here when you are value mapping your supply chain. Are there more energy efficient measures which can be put in place, waste reduction, how waste is disposed of, implementation of clean technology. Again, Apple as part of its plans has also stated that it has secured commitment from over 70 suppliers to use 100% renewal energy for production and that is the equivalent of taking more than three million cars off the road. So it is really important to think about what has been implemented in your own premises and within your own business which may also need to be cascaded through your supply chain. Pre-COVID we were also seeing quite a trend in contracts moving towards just-in-time time supply chain management, so that obviously involves placing materials in the right place at the right time and engaging suppliers as needed. This avoids overspend on materials and filling warehouses and helps streamline production. And technology has also helped this, it has also meant that more data is available to forecast demands and stocking levels. Strategies really need to be thought through and consider how you want your supply chain to operate and how that will work across your supplier base.
The third element on the supply chain is distribution and there are a couple of key threads here. So packaging, we have all seen the huge drive for reduction in packaging and also key packaging changes on the horizon which Ben will talk about shortly. Initiatives that we have seen include driving 100% recyclable or biodegradable or actually avoiding packaging all together. Again this really needs to be passed down in making that measurable within your suppliers.
We often see this managed by putting in place KPIs to achieve reduction in packaging by your suppliers, so you may want to think about what initiatives you can focus on within your organisation be that reduced packaging, more recyclable packaging, and if there are any measurable outcomes you can place on your suppliers. Then it's putting in place very measurable outcomes in terms of KPIs and thinking about remedies for breach of those.
Logistics is the other key area along the distribution route, so commercial freight is obviously a significant contributor to total transport emissions. You see obligations placed on logistics suppliers to match size of trailer with the load being carried, and efficient route optimisations to decrease empty miles and reduce the environmental impact, use of alternative fuels and the drive towards electric vehicles. So we are seeing much more strategy around increase of electric vehicles and more monitoring of how the automotive sector is going down that route.
There has also been a trend towards local supply or manufacture so shortening those supply routes, more on-shoring and also procuring materials from fewer sources. Some organisations have been cutting down their numbers of suppliers and just having a couple of key suppliers in place to again minimise those supply routes.
As I mentioned, with the onset of technology more data is available to monitor routes, replace obligations on suppliers to commit to and demonstrate cost savings. Implementing these initiatives as obligations within supplier contracts and having more transparency are key to making supply chains resilient going forward.
So finally, the last stage, the end of product life. How are companies handling products at the end? So, encouraging recycling and re-using, we've seen the closed loop system, customers having incentive to return defective or recycled products to the manufacturer, and again, Ben will be looking at recycling targets that will be strengthened going forward.
Islabikes is a good example, so some of you may well have heard of Islabikes, especially those of you with children. It's a very high-end bike manufacturer that mainly hits the children's market. They had a project which they call the Imagine Project, which they started running a couple of years ago, and that's really re-thinking the way in which bikes will be made and used in future. For example ownership - so renting instead of buying - and at the end of life the raw materials can be separated and re-used. We are seeing much more of a trend towards closed loop or circular supply chain. Apple in its sustainability plans said that it was going to use a recycling robot called Dave, which disassembles iPhones to recover key materials such as tungsten. There is a need to be thinking of obligations that can be placed on your suppliers to drive these cost-efficiencies by re-using materials. Are things like closed-loop supply chain is something that your business wants to go down and how can that be focussed in your supplier base?
So, that's really just a quick whizz through the supply chain in terms of trends we're seeing and initiatives that can be pushed through into your contractual relationships and it's something you need to be thinking about into all of the contracts that you're entering into, but I will now pass over to Ben who will look at the some of the key legislation that is also sitting behind these initiatives.
Ben Stansfield: Thank you, Sarah, and interesting to know that Apple have called their machine Dave. My father-in-law is a Dave and there is nothing that that man can't fix, repair or maintain, so it's a very suitable name.
So, following Sarah's presentation, I want to highlight a couple of legislative developments and trends in the UK, and highlight to you how you might need to think about those carefully in your supply chains, even if those rules haven't yet crystallised. Action needs to be taken now, in advance of these rules coming. Clearly in 10 or 12 minutes, I'm not going to be able to get into many of the details but I want to give you a flavour of what's out there. So, we'll talk briefly a little bit about packaging, a little bit about reporting. I'm going to talk to you about the EU Green Deal and it's focus in particular on the need for sustainable raw material use, and then I'm going to leave you Jerry Springer-style with a few regulatory final thoughts.
So, packaging - there is a whole suite of packaging changes on the horizon, for environmental nerds like me it's really quite exciting! Some of those are going to impact us fairly soon. So the Plastic Packaging Act, which I'll talk to you shortly about, and another is going to come in a few years' time, the deposit return scheme for drinks containers. You might remember when you were a small child taking Corona bottles, very aptly-named, back to the newsagents, getting your 10p, and then spending on Sherbet Dib-Dabs. That's going to come back, and extended future responsibility schemes for packaging are going to be coming in soon. Although this is not sexy stuff, all businesses use packaging. Either you receive goods in packaging, or you sell goods in packaging. It's really important, packaging protects products in transit, it increases the marketability of goods, if you get the packaging right and make it look attractive and better than competitors', in some cases packaging can be really critical to the value of goods, such as a collectors' item, or a special edition toy.
Right, two interesting developments on their way. First of all the plastic packaging tax. We've known about this for a couple of years, it's been mentioned in recent budget speeches by chancellors. So plastic packaging that is produced in or imported into the UK and if that contains less than 30% recycled plastic is going to be subject to a new levy from April 2022. Now it's going to be about £200 a time, we think, and it's going to be self-assessed, so do not worry there will not be a tax inspector sitting in your waste bins, going through your rubbish! You're going to need your own internal robust audit procedure to go through that.
I think we're expecting legislation or draft legislation a bit later this year as to how the mechanics and the tax are going to work and we'll be looking very closely at the definitions of materials and the exemptions for small businesses and so forth, so as ever the detail is to follow. It is expected that the new tax is going to affect about 20,000 businesses in the UK, so chances are a number of you on this webinar are going to have to get to grips with it.
It's clearly a major issue for supply chains, so whether you're buying in the packaging or whether you're importing goods, you're going to have to get your heads around this. It isn't going to start until April 2022, so you might want to consider doing a trial run next year just to see how much of that packing you are using. Do some audits, find out if you've got some non-recycled plastic packaging that you're going to have to pay for, work out how much it is going to cost you. Data gathering, and this will be a theme of my talk, and robust auditing, are really, really critical to your compliance.
UK packaging - producer responsibility scheme. So, as I said, packaging laws in the UK are in the process of being reformed. It's going to be a series of webinars in itself when it's finalised, and I don't want to get too nerdy on this session.
Primary powers for the new scheme are going to be introduced in the environment bill. That was going through Parliament, we expect that to get royal assent November-December time. It's a flagship piece of legislation and it does a lot of things as well as packaging, and as ever with these things the real detail's going to come in the secondary legislation and in the official guidance. So, of relevant for today, I think we are likely to see a single point of compliance rather than shared compliance across the chain. It is probably going to be the brand owner who takes responsibility. So if your name is on the product, if your name is on the packaging, you are likely to be in the front line for that.
Packaging is likely to go into an extended produced responsibility scheme so you will be familiar with those when you buy new toasters, new hoovers. You go to Currys or whatever shop and they say we will take your old waste electrical and electronic equipment and dispose of that carefully. That is one of those extended produced responsibility schemes. A pay back scheme whereby producers, manufacturers and importers are responsible for disposal. That is coming our way for recycling.
Recycling targets I think are generally going to be strengthened and so is labelling. For consumers there is misleading information out there. Is this recyclable or is it not? So there is going to be better mandatory labelling, there is going to be education for the nation on this, lots of flyers and adverts. That is all going to be paid for by industries. So substantial change is coming for people who use or manufacture packaging. You agree we have to deal with that, who is going to bear the cost? Who is going to bear the administration? Spoiler alert, neither of those are going to be a good thing to have.
Reporting duties. I have probably spoken about this to some of you in the past but there is a slew of reporting obligations out there. Currently only certain businesses, whether it is a balance sheet, a turnover or a number of employees, are subject to that reporting. Reports under section 172 of the Companies Act. You have to describe in those reports how you are considering the environmental and community impacts, streamlined energy and carbon reporting SETR requiring businesses of certain criteria to talk about, disclose your energy use. Greenhouse gas emissions, those have to be reported by certain businesses.
Voluntary reports, they are increasingly popular. Trail blazing businesses are putting information out voluntarily, talking about their impact in far more detail than legislation requires. I think voluntary reporting is fast going to become the norm. I think a lot of businesses are enjoying that dialogue and that communication with their customers. I think it sets a higher bar for investors and consumers. Customers are really starting to expect that and that is a good thing. Why is that important to supply chains? Well, you are going to need your suppliers to give you the data to write those reports. If you have not got that raw data as to the environmental performance of those products how can you analyse it? How can you talk about your environmental impact? So make sure your current agreements are giving you the information that you need to talk openly about your footprint.
Raw materials. So the EU Green Deal. This is the commission's road map as to how it is going to decarbonise an entire continent. My crystal ball is, notwithstanding that we have left the EU, the UK government is not really talking about what it is going to do to get to net zero by 2050 so I am looking overseas. The EU is saying that there is going to be a real focus on resourcing intensive industries, so textiles, construction, electronics, plastics. Certainly textiles and construction are some the UK government has talked about too. We are probably going to see more producer responsibility schemes not just for packaging but for recycling, for re-use of textiles. Expect action on the intentionally added micro plastics, unintentional releases of plastics too. So whether that be from textiles when you are washing your nylon t-shirts or your sports gear in the washing machine, that sheds huge amounts of micro plastics. Also releases from tyres when you are driving around. Those are going to be scrutinised.
Carbon leakage. That is a really big focus at the moment. Moving your manufacturing or carbon intensive industries outside of the EU is a really effective way of reducing the carbon footprint of the EU, but it is not really because it is just pushing the problem overseas. So the EU is talking about carbon taxes applicable to imports, raw materials of products imported from countries which have poor carbon emissions legislation. So is your supply agreement going to make you pay for that tax or will your suppliers be paying for that tax? Again, how are your customers and consumers going to feel about you importing goods or having services provided in those jurisdictions? The world is moving very rapidly and consumer power is extremely powerful. Again, why is the Green Deal relevant? Well, if you are using or you are producing any of those products change is coming. If you are heavily reliant on textiles or plastics change is on its way and your agreements potentially need for you to allow some flex in there. Can you substitute products from your suppliers if legislation changes? What about if public opinion changes? You remember when David Attenborough's Blue Planet came on and suddenly one horrific image of a turtle meant that using single use plastic straws was horrendous. It took a few months for legislation to catch up. Is that event going to be something that you want to react to quicker than law?
Right, Jerry Springer final thoughts on trends. I think these are things you need to think about when you are drafting all your contracts and not just your supply contracts, but flexibility, environmental rules are going to change. The days of regulatory certainty when it comes to sustainability climate environment they are gone. Net zero is not a nice to have. It is not a target we should be trying to hit, nearly hitting the carbon neutralisation goal by 2050 it is not just good enough. If we do not hit net zero we are in trouble. In fact, even if we do hit net zero there is a risk that we go beyond that much talked about two degree increase in average temperatures compared to pre-industrial levels. The world is changing. Net zero has to be hit. So, if climate rules are not working they are going to be scrapped, they are going to be strengthened, they are going to be replaced and it is going to happen quickly. The goal posts are going to move for sure.
So, let's take a look at that plastic packaging tax. Is that 30% recycling content going to change, will it be 40% next year? Or the year after 50%? Who knows. Will the price per tonne increase? Will it go into other areas of packaging too so it is not just plastic that has to have recyclable content? Will it be cardboard?
So, Sarah talked about transport and decarbonising the fleet. The government has currently got a ban on the sale of new petrol and diesel cars and light good vehicles by 2040. They are consulting to bring it to 2035. The committee on climate change, the hugely influential public body that said we should have net zero by 2050 and got their way, they are saying actually 2030 too if not sooner. So right now we do not know if we can buy petrol cars in 10, 15 or 20 years' time. Regulatory certainty has gone out the window. The supply contracts that you are signing tomorrow morning, they have to have flexibility in there to account for those changes because some of those changes might be predictable but some, who knows what is going to happen.
Increased scrutiny. So customers are really savvy. The climate, my teenage daughter it's all she talks about. She thinks her dad is cool for once - and she is wrong - but climate awareness and knowledge is at an all time high. So my point is really simple here, if you mess up your environmental performance there is going to be a fairly instant and unforgiving backlash. So before you sign any contract, including your supplier contracts, ask yourself does this contract improve my environmental credentials? Does this product or raw material help me take a step forward to decarbonisation? If not, is there an alternative option I can use? Can we do better? Is there an alternative raw material? Could there be something better in a year's time, two year's time? Do I really want to be signing up for five years when actually there is something much better round the corner in a couple of years' time? Is there a non-plastic option? Is there one with fewer hazardous substances? Can we get these good shipped to our factory or transported to our factory using less CO2? Can we change the tyres on the trucks to cause less air pollution? Is there an option with more recycled content? What impact does this product or raw material have for bio-diversity?
We talk about net zero, we talk about de-carbonisation but sustainability goes beyond that. We need to prepare, to manage and we need to protect our environment. We need to improve bio-diversity, we need to protect the forest. We need to manage our eco systems better. So it is not just emissions that count. I think, ask yourself what are the optics of this? What does this look like in front of my customers? What do I need to do to convince them that actually this is the green and sustainable choice? Having plastic water bottles in your meeting rooms. It staggers me how many times back in the day, when I went to meeting rooms and I saw that. It is not a good look. Coffee pods in client receptions, again not a good look from a recycling and sustainability perspective. We use vegware for some of our events at Gowling, so environmentally friendly but it looks like single use plastics and the number of times I have had to talk to people at events saying "no, I promise you it is not plastic". So the optics. What people think, that is important.
Finally, what can my supplier do to improve their environmental performance? What help can I give them? It is collaborative, right. What can they do better? Could they air cool their machinery rather than using water resources? Could they use less fertiliser, fewer pesticides? Could they buy renewable energy, change their light bulbs, all the low hanging fruit stuff. Work with suppliers to get them to improve.
My final point is data capture. So increase scrutiny, more reporting. There is a huge amount of green data you need to capture and that is critical. The long-term supply contracts you are entering into now, they have to get that fast reliable flow. Is not good enough as an organisation to say "we do not know" when someone asks you about your environmental impact, your energy efficiency or the sustainability of the raw materials you are using. You have to have that information.
So I am now going to hand over to Sarah to talk us through some practical tips on supply chains.
Sarah: Thank you Ben. That is really great and I hope that has been helpful to everyone in terms of looking at what is on the horizon and what is coming up against the backdrop of the cycle that I talked about and the things that you can be looking at with your suppliers along the way. So, there are obviously some things there that you need to start thinking about now in terms of legislation that will be coming in, to make sure that you can adapt to that quite quickly and make sure your suppliers are on board with that.
So, just to finish off I just wanted to go through some very practical steps with you that you can take away and think about with your own organisations and I have just put a few up there on the slide.
I think the one thing that is key is making sure that any sustainability strategy that you have must be end to end across the supply chain. So it is not just confined to your own site or yourself as an organisation, and if we look at what Apple are doing they have looked holistically across their whole supplier base to drive through their improvements. So, I think it is really key to be looking at the end to end solution. Obviously the value chain map. When you are creating these you should be analysing the supply chain for opportunities for improvements that can be made at all steps of it and I think it is really focussing on the core strategies that you are adopting as an organisation to take forward. It is not just having that overarching commitment to sustainability, it is thinking what those core strategies are. So, is that a move towards closed loop manufacture? Is it a reduction of fuel emissions, ethical sourcing for example? Then it is really making sure that you're cascading those as measurable obligations throughout your supply chain. It is building in obligations on your suppliers to make sure you can meet your end goals and they are working with you towards that and where you have seen that, as I have mentioned, is the supplier's code of practice. So, that has become key now in most supply contracts that we are looking at. It is a really thorough document which, again, is very measurable and is incorporating the best practices and the things that you want your organisation and your suppliers to adopt into your contracts. I think it is also thinking about what are the remedies for failure for that? Could that be a material breach? Could it lead to termination, etc.? So it is making sure that there are measurable objectives and there is some remedy there.
The use of technology. This is obviously really key now going forward in the digital age. There is a lot more data out there and there is a need to do the monitoring and reporting, so really making sure that your supply chain is transparent, that you understand what is going on there, that you are being proactive and not reactive with it so you are aware of any issues from the outset. Obviously tied into that are the audit rights, so the scrutiny sitting behind that.
I mentioned KPIs earlier, making sure that we have measureable objectives within contracts. We do not just want the phrase that suppliers are going to meet sustainability targets without anything sitting behind that. So KPIs are always useful, linking them to specific objectives and making sure again that that is drilling down the efficiencies you are seeking to achieve and making sure that there is some remedy there if they are failing to perform them.
I suppose the key to all this is engagement with suppliers. As I said before, where we have seen supply chains cope really well throughout the COVID situation is where there has been transparency across them. Where organisations are really on top of their supplier base, the sustainability issues and all the other issues and it is just having that engagement which is really making these supply chains work well and drive your business objectives through.
So hopefully that has given you some practical steps to think about when you are looking at your supply chains and I think there is a couple of messages just to leave with you.
It is remembering that any of your suppliers' practices and their risky practices are in turn going to be your own risky practices. So making sure you are looking at your contracts and making provision for those and how they will be dealt with. I think the key message from both Ben and myself is really about thinking about supply chain strategies in every contract you do and having the green agenda high up on the objectives for them, and really thinking about if you are making the contract the best it can be to drive sustainability initiatives or if there are other things that you can use that opportunity are contract negotiation to build in.
So, I think that is all from me and Ben but very welcome to take any questions that you may have.
Emma: Super, thanks very much Sarah and Ben. I think we have had some good questions coming through throughout both of your talks. The first of which, Sarah, if we direct that one at you it is related to supply chains. A valid point on a COVID world with financial pressure across supply chains, the last thing businesses want is to increase costs and whether or not there is a concern that driving green agendas is going to increase those costs. I just wondered if you have any comments or thoughts on that?
Sarah: Yes, absolutely and I think it is always a challenge to balance spend against business objectives and what is the best place to put that spend going forward. I think right at the start of my talk I mentioned some statistics which had come out from the World Economic Forum. So that was really showing that sustainability within a supply chain can have a real positive impact on the bottom line and it is things like having more transparency, so it is building more resilience. It is benefitting the chain if there is more efficiency there and we have also seen research which is saying that it is really helping build competitive advantage and I think it is the day to day issue. So if you are reducing costs then having less packaging will have less packaging costs. If you are having shorter transport routes there will obviously be less costs for the business and then I suppose the big ones is investment and technology. So obviously that big cost at the outset but the benefit from that in terms of being able to forecast demand, forecast warehousing needs, forecast stock and what suppliers need to be doing so that is ultimately driving savings across your organisation.
Emma: Thanks Sarah.
One here for you Ben if that is OK. It is about whether or not new laws or proposals.; Do you think they are going to have a positive impact? So the example given is plastic tax. Do you think this is just another money maker for the Treasury or actually is it meant to nudge businesses into adopting better behaviours?
Ben: So the tax I do not think it is going to be a significant source of revenue. I think the Treasury are estimating something like £250 million in year one so enough for Boris to build a small hospital somewhere. But that is going to go down to, I think it was estimated £210-215 million around that area after two or three years. So it does not sound like it is going to be a big source of income and I think it is probably fair to say that Treasury has not put its most senior and experienced team on this based on some of the conference calls and materials we have seen. But I think it is going to work. I think for a number of our clients I suspect they will be doing the right thing, as it were, anyway. I think consumer power will drive change as effectively as the plastic tax but without doubt it will kill the market for any plastic packaging that does not have recyclable content. So I think it will have a positive effect and I think there will be a lot of this legislation a few per cent improvement here and there and it is all going to add up. I do not think there is going to be any one monumental piece of regulation that is going to suddenly make us clean up our act and become eco warriors. I think there will just be a lot of nudge things along the way.
Emma: Thanks Ben. I was also interested in your comments about environmental reporting and particularly about voluntary reports. What do you think from a risk perspective that is now going to bring for businesses.
Ben: One of the big risks is saying too much and I have seen draft reports which clients have sent me which have been written by junior members of the environment team and they are talking about minor breaches of permits to every single site. Disclosing much more than anyone really wants to read and so, to the in-house counsel, if you take nothing else away from what I have said, please make sure that you are personally involved with vetting those reports because they are going to be read. So, saying too much is a risk. I think saying too little or not doing it is as big a risk. I think silence, it says so much when you do not say anything. We are all lawyers on here so I think getting the balance right is tricky. I think investors and NDOs are going to be reading those reports. Investors, Black Rock, issued a report where they commented on the investee companies environmental performance so they are almost naming and shaming as a regulator might. NDOs are looking at those reports very carefully. They may bring breach of fiduciary claims in future as well so there is a risk there too.
Emma: Thanks Ben.
Interesting question that has come up about the impact or the positive environmental impact of business working from home with the reduced flights, travel, etc. and whether or not the panel think that that is going to continue and whether or not that is then going to have a bigger impact on us looking at more human behavioural ways of changing how we do things.
Sarah: I'll pick upon that. I think that is a really interesting one isn't it. So, we have all noticed it, we have all heard the news stories about the environmental impact of home working and the effect of transport, etc. and I think it is one that organisations really need to be looking at when they are building up their strategies on this. So it is whether that will be something that will be adopted going forward. I think it is obviously case by case on an organisation as to whether that is something on their agenda or not but obviously we are going to see the ripples of that for some time I think.
Ben: Yes, I entirely agree. At Gowling WLG, I do think we have been a bit of a pathfinder as a law firm in having a very loud environmental voice and that policy Planet Plus on our website and we have been very effective on that. We have actually, during lockdown, being working on our phase two of that. For us, a lot of our impact are, flying to the States. We are an Anglo/Canadian law firm and we do a lot of business in the States and many of us would travel over to the US two or three times a year so that is a big impact. But we are now doing virtual trips, so our Texas sales team were staying up very late at night and did a virtual trip to Texas a few months ago and it was really successful. So you can still do business virtually. I think when you are doing your reporting you will need to think about the energy use that people are having at home and I think you will need to make assumptions when you are writing up that and saying we have however many lawyers or however many members of staff who are using laptops and printers and you have to make some assumption around that. But as long as those are transparent and they are credible and people can see you are taking those things into account again I think you can disclose your impact as a business really thoroughly.
Emma: Thanks both. It is now just coming up to quarter to 12 and I said we would finish after 45 minutes so I am going to draw it to a close now. So thank you very much to Sarah and Ben both for the session and for fielding those questions. Do keep an eye out for our next webinar which will be taking place on 24 September and it is on the emerging climate change litigation and the risks of businesses across all sectors. If you are on our mailing list you will receive further details of this.
Before I close if you do have time to fill in that feedback questionnaire please can you do that and all that leaves me to say is thank you to you all for watching and listening today and enjoy the rest of your day.