Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger and Mark Davies consider the environmental implications of yesterday’s Budget, a consultation between the FCA and the PRA on climate change and finance, and a recent case holding that an EIR request was “manifestly unreasonable”.

Budget weak on environmental policies

This was not a Budget for environmentalists. £60 million promised to be spent on planting millions more trees was dwarfed by plans to spend £30 billion on roads. Little mention was made of climate change, with no fresh environmental policies on how to tackle the growing problem and the decision was made not to impose any form of levy on disposable cups. One newspaper described the £10 million pledged to tackle dumped waste as “money found down the back of the sofa”.

Key highlights include:

• As part of the strategy on tackling single-use plastic waste, the government will introduce a new tax on plastic packaging. Subject to consultation, this will mean that packaging that does not contain enough recycled content will be taxed.
• Reforming the Packaging Producer Responsibility System, aiming to increase producer responsibility for the costs of their packaging waste, including plastic. The system will provide an incentive for producers to design packaging that is easier to recycle.
• Should wider policies not deliver on the ambitions of the government in respect of waste, it will consider the introduction of a tax on the incineration of waste, in conjunction with landfill tax.
• A levy on disposable coffee cups was not considered to be effective at encouraging reuse. Government expects industry to go further than the current initiatives and will return to the issue if sufficient progress is not made.
• A government pilot scheme will make available up to £10 million to the Environment Agency to work with partners to clear the worst abandoned waste sites that blight local communities.
• A Woodland Carbon Guarantee scheme will be set up to support the planting of around 10 million trees by purchasing up to £50 million of carbon credits for qualifying tree planting. In addition, £10 million in funding will be provided between 2019-20 and 2022-23 for local community street trees and urban trees.
• In the event that the UK leaves the EU without a deal, a rate of £16 will be applied to each tonne of carbon dioxide emitted over and above an installations emissions allowance, to be based on the installation’s free allowances under the EU ETS.
• £13 million will be allocated to tackle risks from floods and climate change.

Much has been made of the fact that this Budget is highly dependent on a decent Brexit deal being reached. A no-deal departure from the EU will almost certainly lead to this Budget being ripped up and a whole new budget being produced in the spring. The level of uncertainty may be the principal reason for the lack of detail, with further commitments to be found in the Resources and Waste Strategy, due to be published later this year.

However, it is impossible to escape the feeling that the government is highly dependent on the role of the private sector to spearhead environmental progress through innovation and R&D and that it is lacking any form of concrete plan on just how to meet the UK’s environmental obligations in the future, particularly in areas such as climate change.

FCA and PRA discuss and consult on climate change and finance

In the last two weeks both the Financial Conduct Authority and the Prudential Regulation Authority (one of the successor bodies to the Financial Service Authority) have issued papers concerning the impact of climate change on finance.

The FCA’s Discussion Paper, ‘DP18/8: Climate change and green finance’, published on 15 October 2018, invites comments through until 31 January 2019 and notes as its opening words, “Climate Change presents a potentially irreversible threat to the planet,” and that, “Climate Change is likely to have a significant impact on the UK’s economy and financial services market.”

The Discussion Paper goes on to consider the FCA’s future role in ‘providing more structure and protection to consumers’ for ‘green’ financial service products, as well as considering questions of green taxonomy, green disclosure and green performance measurement. The FCA recognises its role as developing in three ways in relation to these issues:

• Ensuring that issuers of listed securities on the regulated market are meeting their disclosure obligations, including those arising from climate change risks;
• Ensuring the 18,000 firms it regulates have adequate controls in place for considering risks, including those posed by climate change and the challenges faced by transitioning to a low carbon economy; and
• In protecting consumers and market integrity, including ensuring that those seeking green finance products are appropriately protected.

Views are invited from: consumers groups and individual consumers; charities; industry groups/trade bodies; regulated firms; policy-makers and regulatory bodies; industry experts and commentators; and academics and think tanks.

The PRA’s Consultation Paper (snappily titled ‘Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change’…), also published on 15 October 2018, seeks views on a draft supervisory statement on banks’ and insurers’ approaches to managing the financial risks from climate change.

The purpose of the proposals set out in the Consultation paper is to ‘set out how effective governance, risk management, scenario analysis, and disclosures may be applied by firms (meaning both insurers and banks) to address the financial risks from climate change’.

It is hoped that by issuing the supervisory statement the PRA will cause firms to take a ‘strategic approach to managing the financial risks from climate change’, including current risks and plausible future risks.

The draft supervisory statement sets out the PRA’s expectations as to how firms will:

• Embed the consideration of the financial risks from climate change in their governance arrangements;
• Incorporate the financial risks from climate change into existing risk management practice;
• Use (long-term) scenario analysis to inform strategy setting and risk assessment and identification; and
• Develop an approach to disclosure on the financial risks from climate change.

Views are invited from all UK insurance and reinsurance firms and groups, banks, building societies and PRA-designated investment firms until 15 January 2019.

Insofar as NGOs have already started referring large companies to the Financial Reporting Council (see this Blog’s entry of 24 September 2018 and the story about ClientEarth) for failing to properly address climate change risks in corporate reports, those invited to express their views would be well-advised to do so, if only to ensure their voices are heard when the changes are rung in relation to greening finance.

The FCA report may be found here

The PRA report may be found here

First-tier Tribunal (Information Rights) holds that an EIR request was “manifestly unreasonable”

In Scott v Information Commissioner & Kirby Muxloe Parish Council [2018] UKFTT 2018_0054 (GRC), the First Tier Tribunal considered circumstances that led it to uphold a decision that requests for environmental information were “manifestly unreasonable”.

The Appellant had, politely, requested surveyors’ reports concerning the lease of a recreation ground from Kirby Muxloe Parish Council. This request was rejected and that rejection had been upheld by the Information Commissioner.

The background was extensive. The Council had previously rejected 49 recent requests from three residents between August 2014 and April 2017, which were often extensive with follow up emails and letters from solicitors, creating a burdensome situation for the Council. Immense stress had been caused to parish councillors and the parish clerk leading to staffing difficulties and an adverse effect on the operating of the Council. The Council took the view that the three residents were working in concert to disrupt the workings of the Council. The Information Commissioner had upheld these rejections.

It was directly relevant that the Appellant had previously written to the Council as a “consultant” on solicitor headed notepaper in which he referred to concerns about the way the Council had been run, that he had been asked to advise some of the parishioners and had raised many concerns relating to the recreation ground.

The Commissioner came to the view that the Appellant was either acting on behalf of the three individuals or in concert with those other individuals. It stated that all the information had to be taken into account in deciding manifest unreasonableness, even where the request was ‘specific, of value, and unlikely to be burdensome in isolation’.

The First Tier Tribunal upheld the decision of the Information Commissioner that the request was “manifestly unreasonable” for the following reasons:

(a) The request continued and exacerbated the burden on the time and the resources of the Council already caused by the Appellant’s clients and others he had worked closely with;

(b) It was likely that the Appellant would not be satisfied and this would lead to further requests;

(c) The request by the Appellant was part of the activity of a group of people who persisted unreasonably in pursuing issues;

(d) The Appellant and others had taken an unreasonably entrenched position;

(e) There were other on-going investigations into the same issues which exacerbated the burden on the Council;

(f) The public interest in disclosing the material was outweighed by the burden and stress placed on the Council by a manifestly unreasonable request.

The decision is particularly interesting because of the fact that the wider picture outweighed the simplicity of the request. The Appellant’s request was characterised by the Commissioner as an attempt to pursue a campaign against the Council by another avenue and was therefore an improper use of a formal procedure. The fact that the request had been made politely did not mean that it was reasonable.

It is also directly relevant that this was a small parish council and therefore susceptible to finding such requests burdensome. Similar considerations are likely to apply to smaller public authorities.

The full judgment can be found here

We published October’s Environmental Law Podcast recently – a monthly round-up of the latest developments in environmental law.

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