The outcomes of COP27 and the United Nations Biodiversity Conference (COP15) saw 2022 close with a number of environmental successes. One of these was the Sharm el-Sheikh Implementation Plan, with a focus on loss and damage finance, while COP15 resulted in the Kunming-Montreal Global Biodiversity Framework (GBF) to address biodiversity loss. Both are significant global pacts, but how will these changes impact environmental law practitioners and what key developments should they look out for in 2023?
The details of the Sharm el-Sheikh Implementation Plan will take time to settle on, however, what is clear is that it sets new ambitions on climate change for the world’s nations. In a historic first, it has established funding arrangements responding to loss and damage associated with the adverse effects of climate change. In doing so, the new fund will provide valuable support to developing nations and help them prepare for the future impacts of climate change.
While the fund is unlikely to directly affect businesses in the short-term, it provides an indicator of how global and national policy changes are evolving. It also highlights the wider theme of mobilising climate finance and encouraging collaboration between investors, businesses, regulators and nations. We’ve talked before on this and the growth we’ve seen in the development of ‘green lending’ products in the UK and increased take up of green finance. It’s a trend we expect to continue throughout 2023 in support of the drive towards a net zero future.
Similarly, finance proved a central part of discussions on biodiversity at COP15. The GBF has put plans in place to halt and reverse nature loss, including some 23 targets to achieve by 2030 and proposals to increase finance to developing countries. The conference also resulted in a series of related agreements approved by countries to implement the GBF – building in planning, monitoring, reporting and review measures.
Biodiversity and climate change go hand-in-hand, so it is perhaps not surprising this features among our key areas to follow in 2023. Fundamentally, a strong healthy environment will support the storage of carbon and prevent its release into the atmosphere, making nature-based solutions essential.
Here in the UK, Biodiversity Net Gain (BNG) is expected to come into force for planning permissions granted from November 2023. Albeit this falls later in the year, it means that all developers will be fully focussed on BNG over the coming months as they prepare their planning applications. Regulations and guidance on this look imminent and so BNG is set to become an industry hot topic.
While focusing on the year ahead, the publication of the Corporate Sustainability Reporting Directive (CSRD) in December 2022 is also something businesses should keep front of mind as new rules phase in. Published in the Official Journal of the European Union on 16 December 2022, the CSRD will require businesses to be more accountable with respect to ESG matters, reporting on their societal and environmental impact and the external sustainability factors affecting their business. It reflects what many large businesses are already doing, but for others it will require further investment in reporting to meet the new standards.
Against a changing landscape of how we live and work, organisations are mindful of the ethical importance around creating a better environment. While many will be at different stages in their ESG journey, as our Tomorrow’s Word report discusses, there is broad recognition of the importance of carrying out due diligence regarding value chains, monitoring compliance and reporting progress to stakeholders. The regulatory environment is constantly evolving and so keeping track of new rules and standards remains a focus for environmental lawyers as they follow the reporting regimes and help business directors deliver their ESG strategies.
In fact, around the time of COP27 we saw increased industry debate around how lawyers can contribute to their clients’ success in a green economy, and it’s an interesting area of focus. In many ways, it simply reinforces the spirit of collaboration needed to bring about change in the transition to net zero and achieving global change.
Our environmental lawyers will be following these themes and developments with interest over the coming months and sharing more insights. Look out for further updates via our LoupedIn blog or sign-up to our sector updates.
