Environment
Powering up Britain: the UK Government’s Department for Energy Security and Net Zero has published its plan for long-term energy security. The plan pushes for cleaner, more affordable energy including adoption of carbon capture (usage and storage), offshore wind, green hydrogen and domestic improvements such as insulation, heat pumps and improved decarbonisation of transport e.g. better EV charging infrastructure. These projects are backed by a multi-billion pound budget. However, the plan has been widely criticised as lacking ambition and dubbed as a missed opportunity to attract investment which will likely lead to the UK failing to meet legally binding climate targets.;
Stand against greenwashing: The global advocacy organisation, Mighty Earth, has filed a complaint to the US Securities and Exchange Commission calling for an investigation into alleged misleading and fraudulent “green bonds” known as “Sustainability-Linked Bonds”. These were issued in 2021 to the value of $3.2 billion by JBS, the world’s largest meat processor. The bond offerings were based on JBS’ commitments to achieve net zero emissions by 2040 and it is alleged that JBS’ carbon footprint is actually growing. The complaint flags that “Scope 3” emissions were excluded even though these make up 97% of JBS’ climate footprint and that JBS also failed to disclose to investors key information about the number of animals it slaughters each year. Mighty Earth’s view is that trillions of dollars need to be invested in decarbonisation and investment should not “…be wasted on industrial meat companies that are driving deforestation and spewing pollution into the atmosphere.”
Deforestation and Tech: Forbes has recently reported on how digital and distributed technologies are being used to prevent deforestation. This includes the use of satellite monitoring and sensors to track activity, developed by companies such as German-based Dryad, which reportedly is aiming to install 120 million solar-powered, early warning sensors in global forests in the next seven years. Dryad particularly wants to eliminate human-induced wild fires which have a devastating effect on the environment. In addition UK-based iov42 and Singapore-based Double Helix Tracking Technologies are testing a new digital platform to tackle deforestation in supply chains. This platform uses distributed ledger technology to help importers to comply with due diligence requirements in environmental legislation.
Social
Gene-editing developments: New legislation in England aims to tackle the issue of food security and facilitate agri-food innovation. The Genetic Technology Act (GTA) will allow farmers to use ‘gene-editing’ to grow crops which are drought and disease resistant and partake in “precision breeding” of animals protected from developing harmful disease. The GTA will introduce a new science-based and streamlined regulatory system to facilitate further research without relaxing strict regulations for genetically modified organisms (GMO). Genetic editing is different to creation of GMOs because editing will only allow changes that could have happened naturally or through traditional farming methods. The UK Government claims this will support resilient food production for decades to come. It says it recognises the need to protect animal welfare and therefore will enable use of technologies relating to plants first, with animals to follow in time. However, there remains some concern among commentators about interfering with nature in this way, in terms of safety and also greater risks to imbalancing natural ecosystems. The approach goes against the position in the EU, where citizens have petitioned to the European Commission to demand that techniques for gene-editing remain regulated and labelled under the current EU GMO Directive.
Voice Cloning on the rise? There have been numerous recent press reports of AI use to clone voices of celebrities such as Drake and also Emma Watson. More worryingly, perhaps, are the reports of the same technology being used to perpetuate scams and financial frauds by impersonating family members. Although voice-based banking was originally hailed as being more secure, inclusive and convenient, cyber criminals are catching up. The Wall Street Journal has recently reported that in the first known case of voice-cloning for financial crime, an unnamed CEO of a UK-based energy firm transferred €220,000 following a series of calls faked to sound like his German boss. This underlines the ongoing need to be aware of these threats and their increasing sophistication and take steps to improve wider awareness and prevention.
Cobalt mining and Modern Slavery: The Independent has recently reported on Cobalt Red, an exposé of artisanal cobalt mining in the Democratic republic of the Congo (DRC) where an estimated two million men, women and children are exploited in mining this material (often with their bare hands). Cobalt is a key component of lithium-ion rechargeable batteries and therefore, in much of the tech we use every day. It is reported that around two thirds of cobalt is sourced from industrial mines with the use of heavy machinery and health and safety standards. The remaining share comes from informal “artisanal” mines where there is no protection for those involved who are exposed to serious health risks from the mining. They are also subjected to appalling living conditions with no sanitation, medical care or education opportunities. Cobalt Red’s author claims that these conditions are “utterly inconsistent” with supply chain policies of major tech and EV companies and that an investment approach at community level is needed.
Governance
ESG Ratings – Proposed new regulations: The UK Government has published a Consultation Paper which proposes the introduction of new regulations for ESG ratings to ensure these do not mislead investors. The proposals suggest tightening existing regulations which could leave a lot less room for greenwashing. The Consultation will close on 30 June 2023. Responses are invited from all stakeholders, including ESG ratings providers, ESG data providers, users of ESG ratings, trade associations, representative bodies, academics, legal firms, and consumer groups.
In March, the World Economic Forum (WEF) reported on the increasing concerns about the risks of AI and how to try to bring about a responsible approach to AI through better auditing and awareness. The WEF has developed a platform to bring together stakeholders for transparent and inclusive AI and its deployment in a “safe, ethical and responsible” way. The platform aims to accelerate the benefits of AI whilst considering and seeking to mitigate the challenges: privacy, accountability, transparency, bias and safety. WEF has a project called: “Empowering AI Leadership” which includes an AI C-Suite Toolkit for guidance in this area.
Sarah Hill is an experienced Commercial and Technology Disputes lawyer who focuses on litigation project management. She also has a strong interest in sustainability, particularly Corporate Responsibility and Sustainability (CRS) and the Circular Economy. She is an Associate Member of the Institute of Environmental Management and Assessment and a member of the Institute of Corporate Responsibility and Sustainability.
