There are many environmental laws and regulations that apply to a variety of activities at companies. These laws may require filing for permits with local, provincial, or federal regulators.
Laws and regulations apply to everyone. From local ordinances that may dictate the height of a fence on your property to speed limits on roads, we are required to be aware and comply with laws.
Enforcement from Regulators
We routinely report in our blogs about various environmental enforcement actions – some, likely most, are accidents or mishaps that result in enforcement. This enforcement is expensive and, on the federal level, can land you on the Environmental Offender’s Registry. There are about 190 companies currently listed on this registry.
Whether it is local laws that apply to citizens or federal laws that govern environmental protection, we don’t have officers lurking around every corner waiting to enforce them (unless you happen to speed, then it seems they are lurking). The unfortunate reality is, some do choose to ignore environmental laws (see Problems with Soil Dumping and Leachate Mismanagement).
Non-Regulatory Pressures on Environmental Programs
Increasingly, there is non-regulatory pressure to encourage not just compliance but environmental stewardship. These pressures are coming from the financial and investment side.
We touched on the topic of sustainability and finance last year: Canadian Financial Institutions and the Paris Agreement: An Ambitious 3-Year Plan. In this blog, we wrote, “The International Institute for Sustainable Development (IISD) in Winnipeg, Manitoba, issued a report earlier this year (January 2019), ‘Leveraging Sustainable Finance Leadership in Canada.’ It should be noted that, later this spring, Canada’s Expert Panel on Sustainable Finance will issue their report. See the Government of Canada’s web page.”
Worlds Largest Asset Company Fundamentally Reshaping Finance
Earlier this year, Larry Fink, Chairman and Chief Executive Officer of BlackRock, Inc., sent a letter to shareholders titled “A Fundamental Reshaping of Finance.” BlackRock is one of the, and perhaps the largest, asset management companies in the world. They have about $7 Trillion (US) under management.
In this letter, Mr. Fink writes, “From Europe to Australia, South America to China, Florida to Oregon, investors are asking how they should modify their portfolios. They are seeking to understand both the physical risks associated with climate change as well as the ways that climate policy will impact prices, costs, and demand across the entire economy.”
The letter goes on to say, “These questions are driving a profound reassessment of risk and asset values. And because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself. In the near future – and sooner than most anticipate – there will be a significant reallocation of capital (their emphasis).”
Financial implications aside, we are seeing greater focus on water management issues (as a result of changing water patterns and increased urbanization), including litigation. In the fall of 2019, we testified before a jury trial on an excess water issue. Regulators are also focused on the impact of excess water on existing discharge permits. See our US Blog, Litigating Water: Too Much Water and Not Enough Water.
Environmental laws and regulations are not going away, and violations will still be enforced. But for many companies, the more-significant pressure on environmental management may come from the financial, rather than the regulatory, side.
If you would like more information about our expertise in water-related issues, including a custom webinar, contact Alan Hahn. If you have any other environmental questions, you can contact me at 519-979-7300.
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