In this latest Environmental Law News Update, William Upton QC and Mark Davies consider developments regarding the Environment Bill, leadership in the climate crisis and a case against Exxon Mobil in the US for improper forecasting of the cost of climate regulation to its business.
The Environment Bill criticism
The Environment Bill was given a Second Reading in the final days of the last Parliament, and was broadly welcomed by all sides of the House. Bills about the Environmental do not often get given Parliamentary time and it is important to get this one right whilst we can. As it stands, this Bill does not yet deliver on what has been promised. Its limited terms have been roundly criticised in a letter to the Editor of the Telegraph signed by 23 environmental law experts led by Professor Eloise Scotford and Stephen Tromans QC, and co-signed by others such as Prof Philippe Sands QC, Prof Jane Holder, William Upton QC and Charles Morgan see here.
The letter argues that the Environment Bill – which aims to “maintain and improve our environmental protection” after Britain leaves the European Union – neither maintains current environmental protections nor enshrines the highest standards in law. The Bill makes no commitment to non-regression in relation to existing environmental standards (despite the Secretary of State’s words in the debate). It sets out a constrained procedural mechanism for introducing a policy statement on “environmental principles” that will do no more than influence other Government policymaking.
We shall see if the Bill can be improved on its promised return after the General Election.
Leadership in the climate crisis
If anyone still doubts that climate issues are not being heard at the heart of government, it is worth noting the speech delivered last week in the presence of the President of the RSA, Princess Anne. The annual President’s lecture was followed by a panel discussion with Sir Ian Cheshire, the Chairman of Barclays UK and the “Government Lead Non-Executive and Lead non-executive director”.
Emma Howard Boyd, Chair of the Environment Agency and UK Commissioner to the Global Commission on Adaptation, spoke about the “The new normal: leadership in the climate crisis”. Her theme was that everyone in society – government, businesses, and individuals – needs to put the climate emergency at the heart of everything they do. One of her points was that this was not just another item on the agenda, but that “the climate crisis is the business of business”. She referred not only to the conclusions of the IPPC, and such figures as David Attenborough and Mark Carney, but also Greta Thunberg and the point made by Extinction Rebellion’s protests – that we must tell the truth about this. Bringing these issues to the front of people’s minds gets us past debating whether or not the latest natural disaster is climate change and focusses minds on what action we must take to reduce the risks and prepare for new extremes.
The full speech is available here and the RSA’s video of it and the subsequent discussion is also available here.
Exxon faces suit in New York about the risk of climate regulation
In an action being brought by the State of New York, Exxon Mobil is accused of misleading investors about the potential costs of climate regulation to its business. Filed in 2018, the suit is a fraud case hinging on internal documents that New York says show that Exxon purposely used lower forecasts for costs associated with climate regulation in order to make investments appear more attractive to investors.
Exxon, in response, do not deny that they used two forecasting methods (adopting the lower) but rather argue that the calculations were ‘proprietary’ and that ‘reasonable investors’ who reviewed the disclosures pertaining to the investments would have seen that climate risk had been evaluated, which, the company says, is ‘all that could have mattered to them’.
It will be interesting to see if the point made by Emma Howard Boyd (see above) that “the climate crisis is the business of business”, is essentially proven in this case. New York has to show that the information kept from investors would have mattered to them (it has sought to do this in evidence by calling an activist investor, a representative of New York City’s pension fund and a market analyst). If a finding is made that the issue would have mattered to those investors it will presumably set down a marker for other companies to consider when taking decisions about disclosures in investment opportunities. Even if it isn’t shown to have mattered to investors in this case, it would presumably not stop similar actions being brought in the future where investors had a more clearly defined investment policy on climate risk.
Closing statements are expected in the next few days.
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