Clyde & Co Resilience Climate Change Risk Liability Report




Businesses need to consider – today - the medium to long-term impacts of climate change on whether a project or investment is viable or not over the next 5, 10, 20-plus years. And scrutiny is intense. Activism and public concern over the impact of burning fossil fuels on the environment is nothing new, but increasingly we are seeing a more active approach to driving change. For example, activists and other “injured” parties such as cities affected by rising sea levels are seeking new ways to “name and shame” those they see as “offenders” in the courts as well as to seek damages for current or even future losses. Financial drivers are closely linked to reputation and brand value. Consumers’ growing consideration of a brand’s perceived ESG (environmental, social and governance) credentials can help damage or drive the valuable intangible commodities of customer loyalty and goodwill, with a critical impact on a business’ fortunes.

The science behind climate change is well known and hard to refute but science is also playing a role in better identifying the consequences of climate change. As Nigel Brook, Partner, notes: “Mainstream science on climate change is now rock- solid. Scientists are able to predict with great accuracy, for example, when and by how much sea levels are likely to rise or assess the likelihood of extreme weather events or shifts in flooding patterns.” On top of this, he points to the emerging field of “attribution science”, by which scientists are able to state, not that climate change caused a specific event, but the extent to which it could have affected it. Once this developing area of science becomes more established, it should make future impacts easier to plan for but it could also make it easier to create credible legal arguments tracing causal liability back to businesses.

- Neil Beresford, Partner, Clyde & Co, London

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