Sustainability and ESG issues have been moving up the agenda lately. If you are an optimist, you might say these issues have now (finally!) taken centre stage. However, up to now the pace of progress has been incremental and sporadic.
Most people agree that the need for these issues to be prioritised is pressing. The climate emergency is reaching a crescendo that is being directly felt by billions. The ongoing pandemic has undone much progress, particularly on social and economic issues and it has exacerbated global inequalities. Our oceans are full of plastic and biodiversity loss is at an all-time high. The impacts of all of this are devastating. We need a step change and we need it now.
There have been a few recent glimmers of hope, such as the long-awaited Environment Act 2021, which came into force last month. Also, despite its mixed reception and diluted outcome, COP26 has focussed minds on the urgent need for effective climate action and global consensus to get there.
Against that background, the launch of the SCL Sustainability and ESG Group is timely. Innovation and technology together are powerful enablers in this space. They bring hope that change is achievable (and faster than ever before). But this is an enormously complex space to navigate. Action which improves one or more areas can have unintended negative consequences for others. A further challenge is that the law often struggles to keep up. Without the right structures and governance, new problems will develop and existing ones will worsen.
Following on from the Group’s session at the SCL Annual Conference last month, I am pleased to share more details about some of the key areas the group will be looking over the coming weeks, months and years. But first, a bit more context.
What exactly is Sustainability?
The word ‘Sustainability’ can be perceived as woolly. Although the term is being used more frequently day-to-day, it’s often misapplied, particularly in the consumer space where it tends to have purely environmental connotations. Green-washing by businesses (and often entire industries) is rife. It can add to the confusion. At its core, Sustainability means meeting the needs of current generations without compromising the ability of future generations to meet theirs.
As well as natural resources, the concept of Sustainability encompasses social and economic resources. This is why ‘ESG’ has become a familiar, and perhaps more accurate term. Environmental, Social and Governance criteria are the pillars for building a more sustainable world. They provide a framework within which to categorise and apply core Sustainability principles. The need for countries, governments, industries and business to operate within meaningful ESG parameters is no longer a ‘nice to have’. It is essential.
The UN Sustainable Development Goals
To be effective, ESG strategies and activities must align with one or more of the UN’s Sustainable Development Goals (SDGs). These 17 core goals build on decades of work and underpin the adoption in 2015 by all UN Member States of The 2030 Agenda for Sustainable Development, described as “a plan of action for people, planet and prosperity.” However, progress on meeting the SDGs has been slow and, as mentioned, much of it has unravelled due to the pandemic.
As technology lawyers, professionals or students, what SDGs do we need to be most aware of? That ultimately depends on the type of work you do, your interests and your organisation. Some examples of where technology is having an impact are:
SDG 2: Zero Hunger: AI in the food industry is mitigating the risks of mass food shortages as the UN predicts that global population growth will swell to over 10 billion by 2050. Examples include Smart Farming and developments in synthetic biology (such as lab-grown meat).
SDG 3: Good Health and Wellbeing: Technology in healthcare is a huge area of promise. Advancements in AI and biotechnologies have been pivotal to improving outcomes through earlier and more effective diagnoses, monitoring and treatment of diseases.
SDG 7: Affordable and Clean Energy: Achieving this goal is critical to better social and environmental outcomes. The mainstreaming of renewables and developments in battery technologies is improving life quality for many and also reducing impacts on the planet. AI, Blockchain and IoT technologies are at the heart of these changes.
SDG 11: Sustainable Cities and Communities: Technology is fundamental to how we design, implement and manage solutions within the Built Environment.
SDG 12: Responsible Consumption and Production: Automation and AI are having profound effects on supply chain management and optimisation as well as waste management. They are facilitating the enormous change needed to make the circular economy mainstream.
SDG 13: Climate Action: Decarbonisation and achieving net zero would not be possible without emerging technologies. Big data, AVs and EVs are just some solutions that are contributing here.
SDG 16: Peace, Justice and Strong institutions: AI, Blockchain and Cyber Security advancements are helping with progress on this goal.
Some of the challenges
Whilst the evolution and application of technology continues to be integral to moving forward, it also presents a wide range of threats. These need to be recognised and managed carefully so progress is not undermined. For example, energy and raw materials usage in technology development and operation is extensive and it’s only growing with increased digitisation. The ICT industry has a heavy carbon footprint which is not sustainable. The effects of this go beyond emissions and include mineral over-extraction and heavy metals pollution and exposure.
E-waste is another challenging area. Over-consumption and irresponsible disposal of appliances and devices in more developed countries is at an all-time high. The approach is still far too linear and opportunities to redefine how we repurpose and reutilise “waste” are being missed. Laws for circularity are non-existent, under-developed or just plain ineffective.
These issues have serious environmental and social impacts, particularly for less developed countries. Further threats also exist such as those linked to privacy, data and cyber crime. Careful and responsible management of these risks means allowing for inclusive access and participation across nations.
There is an underlying tension that exists between profitability and responsibility. Navigating Sustainability and ESG issues requires a cultural shift, not just within organisations but in some cases, entire industries. Reputational risk is also becoming increasingly relevant. In many cases this in itself can provide strong motivation and a commercial deterrent to damaging behaviours or corporate inertia.
More about the new SCL Sustainability and ESG Group and its plans
The new SCL group recognises that there is an enormous amount to engage with within this space, which is one of the reasons why it’s a large group with 15 Committee members. Between the group, there is a wide range of experiences, interests and viewpoints across the ESG spectrum.
The group will focus on a wide range of areas including Climate Action, Access to Justice, Supply chain and Ethics, Security, Governance and Regulation. It will look closely at AI and other emerging technologies and consider data protection and privacy in this context. It will also address issues relating to the Built Environment, impact investing and disputes.
The group will lead on exploring the challenges by considering where the opportunities and solutions may lie. As part of this, it will examine what the trade-offs could be and how they may be balanced.
The new SCL Group will share knowledge to inspire debate and new thinking on Sustainability and ESG factors, offering ideas and guidance on how this thinking might best be applied in an organisational context to engage stakeholders, no matter what your role, level of seniority or professional aspirations.
The ESG Group page is now active on the SCL website so take a look to find out more about who is on the Committee. If you’d like to get directly involved in any of the initiatives, feel free to get in touch with Sarah or any of the other Committee members. They are really looking forward to bringing this space to life within the SCL and beyond.