Understanding sustainability and environmental law: the challenge for businesses

We brought Alison Ogley (Partner, Walker Morris) and Stewart Lenton (European Environment Specialist Services Operations Manager, SLR) together to talk about current environmental issues and the challenges for UK businesses. Read on for their take on ESG and the regulatory approach post-Brexit, the climate crisis, and what’s giving them cause for optimism.

Alison and Stewart have collaborated and presented many webinars and presentations together over the last three years focussed on Natural Capital and the benefits to businesses.

Alison is a Partner at Walker Morris LLP and leads the planning and environment team. Stewart is Operations Manager for the SLR European business, and he also leads SLR’s Global Natural Capital team and European Natural Capital team.

Stewart: Alison, with the wide array of current issues that ‘the environment’ covers, what is your current ‘bugbear’?

Alison: At the risk of getting political, at the moment one of the most frustrating things is the fallout from Brexit and cutbacks from regulators in response to Covid. Our plans to create a truly circular economy are being seriously undermined by a lack of clear regulatory approach to critical issues such as ‘end of waste’. Of course, UK environmental law in large part derives from EU law and there is huge uncertainty as to what will happen with ‘retained’ EU law and how it applies to key aspects of our legal framework such as Directives; there have already been a number of cases before the Courts emphasising the Court of Appeal and above are not bound to keep applying the principles derived from EU law, as it stood at the date of ‘Brexit’.

Stewart: I very much agree with your thoughts on that Alison. This wider lack of clarity around a regulatory approach is leaving most businesses trying to understand how they’ll be affected by the fundamental shift we are seeing in the importance of environmental performance.

Alison: This causes real uncertainty for innovative businesses who are seeking to create new uses for materials which were previously considered ‘waste’. This situation is not being helped by the Environment Agency’s (EA) suspension of their ‘end of waste’ service, leaving decisions about end of waste status to individual EA case officers, which is likely to create a fragmented and inconsistent decision making approach, holding back the progression of a true circular economy when we most need to be doing all we can to support it.

Stewart: Do you think this situation will be addressed to create some consistency and clarity for businesses?

Alison: I personally think this is going to be an issue that will end up being re-litigated through the Courts. Although what would be better for all stakeholders, including the environment itself, would be to have a proactive and pragmatic, but clearly evidence-based approach to end of waste determination on a case by case basis.

The overlap between end of waste and EU/UK REACH is also now in disarray as obtaining REACH registration in the EU is no guarantee of obtaining it in the UK – this seems to be an unnecessary duplication of regulation which again will serve neither industry, the economy nor the environment. Instead of removing red tape, unfortunately, the reality is more has been created.

Stewart: It’s created more red tape and instead of moving to a circular economy model, it’s just created silos. There is still a relatively silo’ed approach to many of the key environmental topics such as Carbon and Net Zero, Natural Capital, Biodiversity and Nature Based Solutions and the need for evidence based reporting.

This is also leading to a whole range of different measurement and reporting systems which can be very confusing. The awareness and ‘will’ for change is growing, what we need now is strong leadership and a clear regulatory and reporting framework to support the shift, a more joined up approach to encourage and allow clear and transparent data presentation.

Are there any current issues giving you cause for optimism?

Alison: Generally speaking, the awareness of environmental issues across a much broader spectrum of society, in part as a result of great profile raisers such as Greta Thunberg and David Attenborough, but also due to Covid, is a cause for celebration.

Stewart: I think this hits the fundamental point of one of the central issues. The awareness around environmental issues has increased significantly and the shift we are seeing in the way businesses approach this is fantastic. There are a wide range of businesses really taking this on and trying to make a difference.

Alison: However, I do think we have to be careful not to throw the baby out with the bathwater. I am an avid believer in sustainable development and business can contribute so much – in fact, I think the solutions which businesses are coming up with are fast outstripping the law (as in the case with end of waste issues mentioned earlier).

It’s great to hear about initiatives such as the recently announced ‘traffic light scheme’ for food, so consumers can better understand the environmental impact of their purchasing choices.

It is so important, in my view, to take that wider holistic approach to environmental impacts. Net Zero is really important, but it is not the full story – far more pressing (arguably) is our unsustainable water consumption. I also think an increased focus on how built development can contribute to Biodiversity Net Gain is fantastic and I fully support this being developed through the Environment Bill – it must be workable and deliverable, but nature has a huge role to play in managing climate change and the truth genuinely is that every little helps!

Stewart: I totally agree, we do need to take a wider more holistic approach to our climate crisis. We are seeing the emergence of many different approaches for demonstrating environmental and social performance; from Biodiversity Net Gain and Carbon Net Zero, to TCFD, the development of TNFD, BCorp, B4SI, together with natural and social capital accounting approaches. Many businesses are now using these approaches to feed into and inform their wider ESG strategy and reporting.

The elements relating to nature and biodiversity are less developed than climate and carbon, but seeing the progress being made definitely gives me optimism that these will be further developed and the drive for nature-based solutions will increase, I am sure.

This all comes back to the central theme here around the need for strong leadership and a coordinated approach to data, metrics and reporting to avoid lack of clarity and the risk around ‘greenwashing’.

I think your comment about the Environment Bill is interesting; will it really deliver the changes needed? Will it really provide greater clarity? And will businesses not only be ready for it, but be able to make the changes needed?