Given that the United Nations COP26 conference is being hosted by the UK near to the time that this article is published, it is timely to raise some of the issues with which lawyers and bars are confronted when confronted by the effects of climate change. Here is a brief explanation of some of them:

1. Solicitors act for carbon emitters. It has been estimated that the City of London’s financial markets, through financing carbon emissions, would be, if they collectively formed a country, among the world’s top ten carbon emitters. The City law firms are perfectly aware of the ethical issues thrown up by their activity for clients in this field. Not only are they targeted by climate activists, but their young lawyers sometimes do not want to work for the companies responsible. Many lawyers would like their professional organisation to provide help and solutions with the ethical issues raised, which can be summarised in this way: How does a solicitor balance a duty to the public interest with the duty to the client?

  • On the one hand, there is the public interest (not to damage the climate); on the other hand, there are traditional principles such as the right of a lawyer not to be identified with the client’s interest, and the right of everyone to have representation. Will there one day be a duty on a solicitor to report on the damage to the climate that the client is proposing, rather like duties in some jurisdictions to report on a client if there is imminent danger of death or physical damage, or the current duty to disclose a tax avoidance scheme? Bars should be formulating their own views and guidance for the profession to be ready for requirements which might eventually be imposed by others.

2. Climate change issues are not only for the big firms. Already now, a law firm’s climate change policies are a part of its attractiveness to future clients, and will soon doubtless become a necessity for being on panels of lawyers. The profession needs assistance in drawing up meaningful policies, since legal services are part of a supply chain. At present, the profession has a low carbon footprint in respect of its own activities, but there are some who propose that service suppliers like lawyers should have to report on their indirect contribution to climate damage by the work that they undertake for clients. In the USA, a group of law students publishes annually a scorecard which ranks law firms by the harm that they inflict on the climate through their client enabling work. And in any case, small law firms are the ones acting for the growing group of victims of climate damage, for instance those affected by fires or floods.

3. Climate change is a new area for lawyers, with its own way of looking at the law and using it as a tool. It is a mistake to think that it is just an aspect of environmental law. For instance, major cases holding governments to account in Europe, so that they keep within their emissions targets, have been brought under the European Convention of Human Rights as a part of human rights law.

In the financial sector, regulators and supervisors require regulated companies and their advisers to start identifying, managing and disclosing climate-related financial risks. In-house lawyers in that sector must advise on a wide range of reporting guidelines, including the Streamlined Energy and Carbon Reporting requirements, Equator Principles, the UK Government Green Finance Strategy, the UK Stewardship Code and the UK Government Green Finance Strategy. Similarly, pension fund trustees are expected to identify and manage climate risks in their investment portfolios and inform stakeholders accordingly.

Here is a sample of other practice areas affected: insurance (asset owners need to understand potential risks in relation to insurability of assets, and contract terms need to be explicit about where climate risks reside); conveyancing (flooding and insurability as mentioned, but also business interruption and rent suspension, plus environmental performance); and construction (energy performance, manufacturing processes, lifecycle maintenance and the ability to repurpose and reuse materials).

Like anti-money laundering, climate change is not only a substantive topic in itself but also a procedural one within law firm management systems, affecting the law firm’s own practices and the way it advises its clients.

Lawyers have not been trained in it as a special discipline, and there needs to be work to prepare the profession. Should it be part of qualifying or continuing education, or both?

Comment

Climate change is an existential event, which, if not tackled, will make most of our other concerns pointless. So I believe that all bars should begin to work on this essential topic, to provide the necessary help and support to the profession.

Jonathan Goldsmith

October 2021

 

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