New responsibilities for business in a green economy
The Environment Act 2021 has now been in force for five months, and whilst it provides a framework for additional environmental regulations to be introduced in the future, much of their specific details remain outstanding.
That said, we consider that the Act is clear in terms of the direction of travel and likely future compliance obligations, so businesses should start to think now about how their operations may need to be revised in time.
What does the Act say?
On its introduction, Michael Gove MP stated that the Act represented, “…a pioneering new system of green governance… our ambition is to be the first generation to leave the environment in a better state than that in which we found it…”
The Environment Act 2021 is an incredibly wide-ranging and lengthy piece of legislation which sets objectives for air and water quality, and includes provisions to help preserve natural habitats and promote biodiversity. The Act also creates an entirely new regulator – the Office for Environmental Protection, to hold government and public bodies to account.
One of the ways in which the Act seeks to revise the current system of environmental management is in moving away from the ‘take-make-use-dispose’ mentality and towards a circular economy of increased and demonstrable sustainability, recycling and reuse. The groundwork provided for these changes within the Act will require businesses to fundamentally review their operations and methodology, to ensure their environmental credentials.
One of the central themes within the Act is the promotion of sustainability, and this is in-keeping with a general move across sectors to the provision of reusable items and products, together with an associated increase in the provision of consumer information.
For example, Schedule 6 of the Act states, “The relevant national authority may by regulations make provision for the purposes of requiring specified persons, in specified circumstances, to provide specified information about the resource efficiency of specified products.”
On one reading, this provision is so generic as to potentially be meaningless. However, the Act indicates that the ‘information about resource efficiency’ may include that relating to:
- the expected life of the product;
- aspects of the product’s design which affect its expected life;
- the availability or cost of component parts, tools, or anything else required to repair or maintain the product;
- whether the product can be upgraded, and the availability or cost of upgrades;
- any other matter relevant to repairing, maintaining, remanufacturing or otherwise prolonging the expected life of, the product; and
- the ways in which the product can be disposed of at the end of its life
The Act goes further, however, and details that the ‘specified information’ may also include information relating to: the materials from which the product is manufactured; the techniques used in its manufacture; the resources consumed during production; and even the pollutants released at any stage of production, use or disposal.
Who is obliged to provide this information?
The Act lays the foundations for specified information in relation to a product to be provided by anyone connected with its manufacture, import, distribution, sale or supply. In other words, anyone other than the end consumer.
It may be the case that some of this information is not currently captured by businesses, and processes will have to be introduced to ensure that it is available.
Sustainability in practice
A move towards increased sustainability and building a circular economy is already noticeable, across sectors. For example, there are many online retailers who now offer clothes for hire, rather than purchase. This mirrors the current hire process of heavy machinery, and it is likely that the groundwork provided by the Environment Act will extend this practice to other industries where individuals do not require permanent possession of an item but are content to hire for only the temporary period it is needed.
In terms of increased consumer information, the Food Labelling (Environmental Sustainability) Bill proposed a kitemark for food to indicate that they had environmentally sustainable origins, such as protecting endangered species, preventing biodiversity loss, avoided deforestation and avoided increased carbon emissions. Although the Bill was introduced it failed to complete its passage through Parliament before the end of the 2019-21 session and has not progressed further. That notwithstanding we consider that the introduction of this draft legislation is indicative of a general parliamentary intention and drive, which is in-keeping with the objectives of the Environment Act.
The Act also provides a basis for the introduction of deposit return schemes, the continued war on plastic and prohibition of single-use plastic items.
It may also be the case, in much the same way as white goods are provided with an energy-efficiency rating, that future goods are provided with an equivalent environmental score.
What can businesses do to prepare?
It is not known when further provisions will be introduced, but we can be certain they will be announced in due course and the Environment Act provides a clear and unambiguous basis for future regulations and environmental responsibilities.
There is an increasing awareness of sustainability as a concept, and this emphasis only looks set to continue and increase over time.
In the absence of details of future regulations, we recommend that businesses undertake now an internal review of their systems and production methods, to identify areas where more could be done to demonstrate their environmental credentials. This process will help to position organisations in the most favourable position for when further environmental regulations come into force in accordance with the Environment Act.
Bill Dunkerley is a director in the regulatory team at Pannone Corporate LLP. If you have any questions about the issues raised in this article you can contact Bill on 0161 393 9087 or email@example.com