The Law Society of England and Wales published a report titled “Horizon Scanning - Climate change risks – the future of law as we know it?” in February 2021. You can access the full report here.  

With COP26 approaching, this feels a timely occasion to revisit the key discussion points on climate change risk for the legal profession and beyond within this report.  

Key climate change risks to the future of law  


 Within the report, Nigel Brook and Zaneta Sedilekova of Clyde & Co. LLP review the physical risks, liability risks from rising climate claims and transition risks as we move to a low carbon/net zero future resulting from climate change.  

The below provides a brief snapshot of some key comments raised in the report:  

  1. Physical risks: viewed to extend to the economic cost and financial loss stemming from extreme climate events and changes to climates. These can have immediate and direct impact on society e.g., bushfires in Australia and extreme floods across Europe in the past year. 

  • For lawyers, the growing severity and frequency of these events can impact on insurability; risking a situation where loss caused cannot be insured against at all.  
  • The report exemplifies parametric insurance as one of many innovative solutions here, enabling smart tech to connect a parametric scale of the potential event to the level of insurance pay-out.  
  1. Liability risks: as briefly explained above, this relates to the risk of legal climate action (or green litigation) being brought against companies and governments for climate-change impacts and damage. This risk also extends to the act of greenwashing, where corporations misrepresent their ‘greenness’ for gain e.g., misleading environmental credentials of products.  

  • For lawyers, we must acknowledge the difficulty of attribution here – climate change does not respect national borders – and question the meaning of this term in the context of green litigation. The report provides detailed insightful analysis on this topic. 
  • The report notes that, as a profession, we must be aware of the especially numerous legal systems/forums and grounds that a claimant can base their climate action in and on. The report provides examples of this in practice, evidencing the breadth of space available for choosing strategic cause of actions.  
  1. Transition risks: stemming from a move towards a low-carbon economy and away from carbon-intensive assets. The report discusses the evolving term of stranded assets in this regard and consequences of these.  

  • Lawyers will need to advise clients on transition risks in terms of managing these and minimising their impact on the client’s operations. For instance, advising shareholder clients to steer away from unsustainable investments and require more due diligence and disclosure before investing to bore out any risks. Work will also flow from the ever-increasing uptake of climate-centred disclosure frameworks and potential impacts on the client of not fully adhering to these.  
  • The profession will also increasingly be involved in strategic litigation (where the client is a shareholder in a corporation to gain legal standing to claim against it) and must be live to the intricacies of this to achieve client objectives. 

October 2021