Environment and Sustainability

2023 was a record-breaking year for the planet, with many countries reporting their wettest and hottest year on record.

Consequently, the regulatory landscape is now shifting rapidly as governments across the world grapple with how to manage, mitigate and adapt to a changing climate. Businesses will ultimately bear the brunt of these changing times. Here’s what your company should prepare for.

Net Zero targets

COP28 reaffirmed the 2015 Paris Agreement target to achieve net zero by 2050. The Dubai agreement mentions fossil fuels for the first time, with the goals of “transitioning away from fossil fuels in our energy systems, beginning in this decade” and “rapidly phasing down unabated coal.” However, countries will still be able to permit new oil and gas exploration, and to use carbon capture and storage to continue coal production.

Most countries have been transitioning away from fossil fuels for decades. The opportunity to “phase out” fossil fuels within a defined timeframe hasn’t been achieved, but the continued commitment to achieve net zero by 2050 will impact every business sector.

Taking climate action over the next six years (up to 2030) will be vital to stay on course for net zero. We expect to see a steep rise in organisations signing up to voluntary pledges on carbon reductions in 2024.

From December 2023, 4,088 companies had set science-based targets and 6,797 were taking action under the Science Based Targets initiative.
Supporting the Race to Zero Campaign, over 8,000 companies have pledged to reduce greenhouse gas (GHG) emissions by 50% by 2030 and reach net zero by 2050.
Climate Action initiative.

At Irwin Mitchell, we've set science-based targets to reduce Scope 1 & 2 GHG emissions by 60% by 2027.

Our aim is net zero across the entire value chain by 2040. We're also supporting our clients with meeting their net zero ambitions, including:

Helping clients to accelerate climate action and influence their supply chains
Advising on climate change legislation and mandatory reporting obligations
Providing guidance on setting targets, climate transition plans and sustainability strategies
Delivering carbon literacy training for employees and managers
Climate contract reviews of commercial contracts and property documentation.

How we can help

Mandatory reporting

Mandatory carbon reporting

Mandatory ESG reporting

Compliance

Corporate sustainability due diligence

Uncapped variable monetary penalties

Biodiversity

Environment Act 2021 – Biodiversity Net Gain

This is the first framework for one of the mandatory targets set out in the Environment Act 2021. Last year saw the release of the draft Regulations for biodiversity net gain regime, which are set to go live on 12 February 2024.

To recap, this framework requires that, following the implementation date, all new developments will be required to achieve at least 10% biodiversity net gain value. This can be achieved either onsite within the red line boundary or offsite either within a wider landholding but not subject to the planning application or third-party land. If neither of these options are available, a developer will be able to purchase statutory credits.

The net gain must be secured for a minimum of 30 years, and will be provided for by either a Section 106 Agreement (enforced by the local planning authority) or a conservation covenant (enforced by the appropriate authority).

Using the draft regulations as a guide, planning applications will need to be accompanied by the following information:

A biodiversity net gain statement confirming the development would be subject to the net gain requirement.
The biodiversity value of the site at the relevant date, together with the completed biodiversity metric calculation.
A description of and a plan showing any irreplaceable habitat.

This is the first framework for one of the mandatory targets set out in the Environment Act 2021. Last year saw the release of the draft Regulations for biodiversity net gain regime, which is said to ‘go live’ in January 2024. However, there is some doubt as to whether this date can be met.

To recap, this framework requires that, following the implementation date, all new developments will be required to achieve at least 10% biodiversity net gain value. This can be achieved either onsite within the red line boundary or offsite either within a wider landholding but not subject to the planning application or third-party land. If neither of these options are available, a developer will be able to purchase statutory credits.

The net gain must be secured for a minimum of 30 years, and will be provided for by either a Section 106 Agreement (enforced by the local planning authority) or a conservation covenant (enforced by the appropriate authority).