Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger  considers the Government’s response to the EAC’s recent report on the 25 year Environment Plan, further official responses to the on-going inquiry into green finance, and flaws found by the chemicals industry in the Government’s REACH plans.

Latest offering on environmental policy published

On 6 November 2018, the Environmental Audit Committee published the Government’s response to the EAC’s most recent report on the 25 Year Plan for the Environment. The response is a classic example of avoidance of the issues raised and attempts to make use of previous policy announcements to deflect attention away from the fact that there are very real risks resulting from the uncertainties created by Brexit.

The response’s wooliness can be demonstrated in the following highlights:

1. When asked for specific actions and legislation to turn aspirational targets into concrete delivery plans, including putting the 25 Year Plan on a statutory basis, the  Government’s response was to relist the aspirational goals, state that it intends to “consult fully and develop robust strategies” and state that the Government is bringing forward the first Environment Bill in over 20 years that will build on the 25 Year Plan, without delving into any specifics.
2. On air quality, the Government referred back to its Clean Air Strategy, which is subject to consultation.
3. When asked for long term legally binding measurable targets to be part of upcoming environmental legislation, the Government stated that it already has extensive targets for the environment, ranging from water quality to air quality to waste management, which will continue to have effect after the UK leaves the EU. The Government is committed to reporting on policy targets and on environmental outcomes overall and Parliament will have a role in scrutinising Government’s performance against its commitments. This doesn’t suggest that there is likely to be any change to the status quo and doesn’t take into account that the European Commission plans to review relevant Directives, such as the Water Quality Directive as part of its 2019 Work Programme.
4. When asked for interim targets, the Government has stated that it is committed to engaging widely on the development of a comprehensive suite of indicators and metrics to measure environmental change and to report on those regularly. It also referred to the new independent environmental watchdog and that they are currently analysing the responses to that consultation.
5. The response ducked the EAC’s conclusion that it is “too weak” for the Government to simply ‘have regard to’ environmental principles and that their application should be limited to central Government rather than including all public bodies.
6. Whilst acknowledging the potential benefit of the concept of “environmental net gain”, this will take place over a “longer timescale”, with no specifics on the timeframe given.

The Government did agree to undertake an audit of the main existing environmental targets, which will be published in due course. It rejected a call for an independent Environmental Enforcement and Audit Office, preferring to fall back on the independent watchdog. It stated that it is committed to ensuring that environmental principles have an “equivalent effect” in the UK after we leave the EU. This is not the same as ensuring environmental improvement following Brexit. In particular, despite this assurance, the response did not commit to replace the one third of EU environmental legislation (air, waste, waster, chemicals) that cannot be copied and pasted into UK law through the EU Withdrawal Act.

The full response can be found here

Further Government response on Green Finance also published

At the same time, the EAC also published the Government’s most recent response to the on-going inquiry into green finance.

The main points that arise out of this response are:

1. It was agreed that the Government should clarify that trustees of pension schemes have a fiduciary duty to consider risk and opportunities in the long-term, including environmental risks. It is likely this clarification will take effect from 1 October 2019, by way of an amendment to the Occupational Pension Schemes (Investment) Regulations 2005.
2. Climate risks faced by a pension scheme are entirely determined by the firms in which they invest. For large institutional investors to be able to make meaningful disclosures in line with the Task Force on Climate-Related Financial Disclosures, there first needs to be widespread reporting by firms.
3. UK Climate Projections for 2018 will use IPCC Representative concentration pathways to model a range of greenhouse gas emissions scenarios. This updated evidence base can help underpin decision makers assessments of the physical risks arising from climate change. (It may have been more helpful to agree to produce ‘off the shelf’ reference scenarios that could have been picked up and used by companies).
4. It is proposed that a mandatory reporting obligation on energy use and emissions will fall on all large companies and large limited liability partnerships – an estimated 11,300 organisations.
5. It is too premature to wheel out mandatory climate risk reporting across the board. A voluntary, industry-led approach to climate risk reporting is encouraged.

The publication comes in the wake of the publication of the FCA’s discussion paper on ‘Climate change and green finance’ and the Prudential Regulation Authority’s consultation paper on financial risks from climate change, reported on in this blog last week.

There appears to be a unique opportunity at present to be able to drive environmental outcomes, transparency, policy development and targets that Government at present appears to be unwilling to embrace. Perhaps it is the fear of straightjacketing business at a time when economic considerations are thought to be paramount or perhaps it is a lack of vision or ambition, but certainly the Government have not taken up this opportunity in its response. Would the position be different if environmental outcomes equated to short term economic gains?

The full response can be found here

Flaws pointed out in the Government’s REACH plans

Following on from our slightly critical analysis of the most recent ‘no deal’ guidance notes published by the Government, the Alliance of Chemical Associations has written to Thérèse Coffey to express its concern about DEFRA’s approach to implementing a UK REACH.

Specific concerns that are highlighted are:

1. The timescale for the provision of information on existing registrations is seen as too short;
2. The cost and challenge of having to submit the ‘full data packages’ that supported original EU registrations, when in numerous cases companies either do not hold or do not have access to those packages; and
3. The fact that there is no obligation for EU-based companies to share data with UK companies could lead not only to the duplication of testing but also to the submission of incomplete datasets which potentially severely compromises the validity of the entire data collection exercise.

The letter states that the proposed two year timeframe to re-negotiate access to data or potentially re-test and re-submit a registration under UK REACH is unrealistic. Furthermore, there are a huge number of SMEs that routinely import substances or mixtures into the UK that will now need to register under UK REACH. Further attention needs to be paid to how these new registrants will be put in touch with one another and how ‘existing UK registrants’ would be permitted to share data with new registrants when they don’t own the data in question and don’t have the authority to permit others to use that data or refer to that data.

It is estimated that it will cost a further £1 billion to comply with the Government’s current no deal proposal, which will do nothing to improve the environment and which is more likely to restrict the competitive advantages of UK businesses by reducing the number of substances available to the chemical industry.

Strong words indeed.

The full letter can be found here

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