The next thing you might be contacting your lawyer about could be your potentially over-inflated sustainability claims. Virtue signalling by ‘greenwashing’ could end up being more expensive than taking the measures you have wrongly claimed to.
The dangers are highlighted in a report from the Institution of Civil Engineers – Financing Low-Carbon Infrastructure – that warns of the need for all infrastructure projects to be designed as decarbonised infrastructure, or face being accused of failing to recognise the scale of climate change and the sector’s contribution to emissions (see News).
But most measures of carbon and emissions reduction and of progress towards net zero targets are not assessed or tested by Government. Assessments can be procured from a number of independent bodies and certifications can often be achieved, but questions are increasingly being asked if some of them are worth the paper we would rather – for sustainability reasons – they weren’t written on.
Eventually government will have to get involved in producing methods of measuring emissions that can stand up to intense scrutiny – which is increasingly to be expected from worried project funders and insurance companies.
ICE’s report says accurate emissions reporting must become integral in the design of major infrastructure if private finance is to help fund green projects. Projects may also risk litigation for failing to mitigate the release of carbon in their design, construction and operation.
Interest from private funders to invest in low carbon infrastructure is said to be growing, but financial markets are highly sensitive to risk and see climate change as a big risk factor. Financial markets will increasingly look to construction professionals like civil engineers for accurate data and information starting from the design stage to de-escalate the risk. The report says: “This means providing lenders with the reassurance that the project is resilient to climate change-related shocks such as flooding and temperature rises.”
It also says that strict benchmarks and assessment criteria will soon require civil engineers to account for the carbon output and sustainability of the infrastructure they design. Those projects failing to meet these criteria may struggle to access financing.
There is also a risk that projects which ignore decarbonisation are potentially open to future litigation; the report says this is an emerging area that is likely to continue to develop quickly, and warns about liability arising from failure to mitigate preventable climate damage and making false or unsupportable claims about climate benefits.
Clients won’t stand idly by, and lawyers are warning that some might build in clauses requiring projects to factor in climate change, which could lead to claims of a breach of duty of care if contractors fail to meet those requirements. Insurance policies are already factoring in climate change as a known and identifiable risk, which is being reflected in some contract conditions.
If a company promises contractually to provide a building or project that meets certain environmental performance criteria, this could be enforceable by the client. A fast changing climate change legislative environment risks placing construction supply chains exposed to the danger of retrospective claims, a danger the legal fallout from the Grenfell tragedy highlights.
The message is don’t make sustainability related claims that you can’t substantiate; and make sure you know what you should be doing to play a proper role in the climate change struggle.
Nick Barrett
Editor