“Addressing the interconnected emergencies facing our societies and planet will require systems change, and transformations of that scale are a team sport.”
(See Harvard Business Review, The Myth of the CEO Hero)
It’s common knowledge that the safe limit for the rise in global average temperature is 1.5 degrees Celsius.
A recently published UN Report concluded that if carbon emissions are not cut in half by 2030 and net zero emissions achieved by 2040, our world would face catastrophic and irreversible damage. Failure by governments and corporates to take radical steps now will mean that those in power will be on the wrong side of the argument, and ultimately, the wrong side of history.
A wide range of new commitments have been made by governments and companies in the run-up to November’s COP26 in Glasgow. Some cynics would argue that this is conveniently timed posturing. But the world’s most powerful economic actors showing a willingness to acknowledge the climate emergency is positive news; scarcely imaginable a year ago.
China and the United States have pledged to reach net zero in their economies by 2050 and 2060 respectively, while over the past year a fifth of the world’s 2,000 top publicly listed companies have made an emissions pledge of some kind. The UN report confirms however that greater steps are required.
And they are happening already. Dutch courts recently concluded (in the milieudefensie ruling) that Shell’s level of CO2 emissions had breached human rights. In Australia, a court ruling found that the environment minister had a duty of care to children to consider the harm caused by climate change as part of her decision-making in whether to approve the expansion of a new coal mine.
These cases did not require any alteration in the existing legal framework. Rather, activist groups took advantage of the mainstream awareness of the climate emergency to bring about legal precedent and behavioural change. Even hedge funds – the famed enemies of the financial crisis – are holding companies like Exxon to account.
However the battle is far from over. CEO of Royal Dutch Shell, Ben Van Beurden, responded to the Milieudefensie ruling by initiating share buybacks and increasing dividends by 40%, simultaneously consolidating control and sweetening the deal for investors who may have had concerns about the company’s strategy and pressing ahead with exploiting the new oil reserves in the Cambo oil field in the West of Shetland.
Mr Van Beurden said, “For as long as the UK still needs oil and gas in its [energy] consumption, it’s better to produce in its own backyard”. And to a degree, he has a point.
Demand is not insulated from supply. All the oil majors could be using their profits to invest in sustainable energy sources, with increased demand making them cheaper and more appealing.
Issues of greenwashing aside, it is going to take huge, co-ordinated effort to temper the climate emergency. Shell; Exxon; Saudi Aramco; Rosneft and other energy giants are free to argue that, they can’t stop it alone. But if governments, citizens and corporates come together collectively, they just might.
In order for the force behind real change to be effective, emerging technologies must get cheaper, large energy companies need to be held to account, and global collective endeavours (including new legal and moral norms) need to be established. Transition will not be easy – and the livelihoods of many workers in the fossil fuels industry must be considered – but there is no alternative.
The legal profession has an essential role to play in this transition, not least because companies are likely to contest the legality of political (and first instance legal) decisions made in the interests of the environment.
At London Law Collective, we are taking our responsibilities seriously. We are members of 1% for the Planet; and have very recently been granted Pending BCorp Status. Our focus as advisors is upon companies that embody or support social purpose.
Elsewhere in the legal profession, the Net Zero Lawyers’ Alliance and The Chancery Lane Project provide their services to companies seeking legal assistance to implement net zero plans within their businesses and supply chains.
London Law Collective is one of the firms participating in The Chancery Lane Project’s current drafting series, helping to develop new contractual clauses and nudge corporate behaviours more generally to aid the required economic transformation.
We want to do much more, so if you are a business that is interested in discussing how we can facilitate your response to the climate emergency, we would love to hear from you.
Please get in touch at hello@londonlawcollective.com
