Environmental Law 2018

The Environmental Law guide provides expert legal commentary on key issues for businesses. The guide covers the important developments in the most significant jurisdictions.

Last Updated March 07, 2018


Hogan Lovells' environmental lawyers can ably assist with both the most complex legal challenges and the day-to-day issues that must be addressed to maintain compliance and keep abreast of recent policy and regulatory changes. The team offers expertise in litigation, permitting, compliance counselling, regulatory and legislative advocacy, and commercial transactions' advice. The firm's lawyers have earned a reputation as effective negotiators. The team has experience with manufacturing, energy, transportation, chemicals, agriculture, and many other sectors. State and local governments and trade associations also turn to the firm to address their environmental issues.

Trends, themes and developments in international environmental law

This introduction considers some of the main trends and themes in international environmental law and how these might influence its future development.

Climate Change

It is now twenty years since the Kyoto Protocol, and it remains difficult to begin this introduction other than with climate change. The search for effective and equitable solutions to manage climate-change contributions and impacts will continue to be the main driver of international environmental and energy policy for the foreseeable future.

Climate change will remain a critical business issue due to market shifts favouring lower-carbon products and services; potential operational and supply chain disruptions; higher costs of energy, food, and other commodities; and, over time, shifting production and transportation patterns to adapt to local conditions.

The decarbonisation agenda within the energy sector, and the promotion of low carbon and renewable energy and energy efficiency across all sectors, will be the most visible responses to climate-change concerns over the near term, but over the longer term there may be more fundamental changes to environmental policy. Traditional environmental goals of conservation, preservation and restoration may increasingly give way to the improvement of climate-change resilience and capacity for adaptation.

For the past twenty years, it has been assumed that an international agreement was the necessary precursor to meaningful action by national governments, but, despite the failure to conclude an international agreement, many countries have made domestic commitments, including China, Mexico and Brazil. China has already said that it wishes to ensure that domestic greenhouse gas emissions reach their peak “as soon as possible” and will cut carbon intensity (but not absolute emissions levels) by 40 to 45% of 2005 levels by 2020. 

Even with the absence of international agreement, China has said that preparations for a nationwide emissions trading scheme are complete. South Korea set up a new domestic emissions trading scheme in 2015, the largest such scheme outside of the EU. Japan has introduced a carbon tax and new laws promoting energy-efficient cities. The UK has passed the Climate Change Act requiring current and future governments to reduce absolute emissions by 80% on 1990 levels by 2050, a target which the government claims the UK is on track to meet. Despite the US withdrawal from the 2015 Paris Agreement, President Trump has recently said the US could "conceivably" return to the accord.

Recent years have cast doubt on the link traditionally made between international and domestic action on climate change, and also the assumption that there must be economic winners and losers in order to tackle climate change. There is an increasing view that national self-interest is the only route to overcome the burden-sharing debate and deliver emissions' reductions. For many countries, including China and India, the prevailing factor  which has driven reductions in fossil fuel consumption is physical and economic energy security.

The rise of the developing world   

Economic and pollution growth and rises in living standards in many developing countries have dramatically increased their environmental footprint. In the past, social and economic concerns in developing countries meant that they were reluctant to prioritise pollution control and other environmental matters, but this is changing.

The population and prospective global impact of China and India in particular has made them important players in any analysis of international law and policy. In China, a new national Environmental Protection Law was introduced in 2014 to help address long-standing air and water pollution concerns. China is also witnessing a trend towards sustainable development and away from the "development at any price" model.

Internationally, the notion of “common but differentiated responsibilities” of countries under the Rio Declaration on Environment and Development based on “the different contributions to global environmental degradation” has so far provided a key argument that industrialised countries bear the primary responsibility for addressing environmental problems. However, with the growing environmental footprint of developing countries, the relevance and application of these principals has become increasingly contentious and difficult to justify.

Water availability

Some commentators believe that water scarcity will become the main environmental issue for the global economy. For businesses, this is likely to result in new markets for water-efficient products; potential constraints on growth due to water scarcity; operational and supply chain disruptions; conflicts with other stakeholders over limited supply; and increasing costs of water.

In 2010, the UN Environmental Programme published ‘The Greening of Water Law’ which looks at ways to elevate the status and importance of environmental concerns under water-resources law to accommodate the water needs both of people and the natural environment.

At an international level, discussion of water-offsetting is gaining momentum ie where public or private sector organisations commit to water-reduction programmes and in the interim acquire water allowances to offset their consumption. It sits alongside the attempts of some corporates to map their water footprints. Moves to monitor and measure water impacts are also indicative of the natural capital trend discussed below.

Human rights and the environment

The connection to public health has arguably been the primary motivation for environmental law historically. Recognition of the link between human rights and environmental and health protection has attracted wider support in recent times.

In July 2010, the UN General Assembly explicitly recognised a human right to clean drinking water and sanitation, and environmental protection generally is increasingly seen as a human rights issue. This perspective could have significant implications for the future direction of environmental law, because it directly addresses environmental impacts on the life, health, private life, and property of individual humans, rather than on other states or the environment in general.

The UN Guiding Principles on Business and Human Rights (UNGP) has led to a change of attitudes in boardrooms to human rights issues. They have formed, and will continue to form, the basis for a number of other initiatives that are impacting companies setting the tone for what is meant by the “responsibility to respect” human rights, including in relation to EHS issues.

Corporates will continue to be under pressure to demonstrate that they are taking steps to implement all aspects of the UNGPs, not least because the UNGP have now become effectively embedded in a range of other international standards and in many corporate policies. In particular, corporates are under pressure, not just in respect of their direct actions but also the actions of their subsidiaries, contractors and suppliers overseas. This is likely to lead to much wider notions of corporate responsibility from both legal and non-legal perspectives, and not limited to human rights issues.

Corporates are increasingly being held responsible for human rights and environmental abuses committed by their subsidiaries, contractors and suppliers. This trend is clearly reflected in the California Transparency in Supply Chains Act 2010 and UK Modern Slavery Act 2015, which introduce human rights' reporting obligations specifically focused on supply-chain aspects, including those overseas, and which have already influenced the adoption of similar requirements in a number of other jurisdictions.

The business and human rights agenda is likely to influence future legislative measures (often with extra-territorial implications) and will increasingly inform what corporates will be expected to do across the world, both as a matter of public opinion and policy and also in legal terms – for example in order to satisfy a common-law duty of care to prospective claimants.

Natural capital

There is a continuing trend towards finding ways of placing monetary value on environmental resources (so-called 'natural capital') that were previously economically invisible. As the depletion of environmental resources and systems gathers pace, businesses that respond to this situation should be well-placed to spot opportunities to innovate as well as to manage the risks associated with it.

The concept of incorporating natural capital into national and corporate accounts was first suggested by the UK government's Natural Capital Committee. Some corporates have already published natural capital profit-and-loss accounts in an attempt to put a monetary figure on the natural capital they use.

A concerted effort is underway to create methodologies and standards to value and account for natural capital in business. The Climate Change Alliance, which includes international companies such as Coca-Cola, Shell and Kingfisher – plays a prominent role and offers opportunities to influence the development of methodologies and standards. Governments, particularly in developing economies, are also responding by valuing their natural assets.

The European Commission has set natural capital as one of its environmental priority objectives. It believes that if impacts on the environment are properly accounted for and if market signals also reflect the true costs to the environment, this will stimulate investment and innovation in the green and low-carbon economy.

Sustainability and resource efficiency

Recently, the international discussion about sustainability has taken a new course through the development of the concept of the circular economy. The circular economy goes beyond the intention of not harming the environment as the circular economy is restorative and regenerative by intention and design. It shifts the focus from a ‘take, make and waste’ way of production to a ‘reduce, reuse and recycle’ mentality.

This shift spins off several commercial opportunities and business innovation by materialising and integrating financial, economic and environmental benefits and costs.

The concept of "choice editing" refers to the active process of controlling or limiting the choices available to consumers so as to drive to an end goal, specifically by banning things or imposing punitive taxation. The term has gained currency in discussions about sustainability.


The loss of biodiversity and degradation of ecosystem is seen as an increasingly significant issue internationally. In the past, discussions on biodiversity have focused on specifics such as coral reef degradation, deforestation or declining fish stocks. More recently, the wider importance of biodiversity and ecosystems, including to businesses, and the potentially profound consequences of their loss have been recognised. In time, there is likely to be increased market, reputational, and regulatory pressure to reduce biodiversity impacts, which present both business risks and opportunities.

There are physical risks to business arising from scarcity and increased costs of resources and potentially reduced productivity. Companies may also face increased litigation risks as a result of their exploitation of biological resources or their adverse impacts on ecosystems.

With humans' ecological footprint exceeding the earth’s biological capacity, the resulting pressures from habitat change, over-exploitation, pollution, invasive alien species and climate change have decreased biodiversity seriously. The loss of biodiversity and ecosystem exacerbates and amplifies other environmental risks. For example, the removal of key coastal ecosystems often increases the severity of coastal flooding; ecosystem degradation has been a key driver of desertification; and food security is highly dependent on biologically diverse soils and other key ecosystem services such as water regulation, pollination and climatic stability.

Governments around the world are introducing new compensation regimes and market-based instruments to help address threats to ecosystems and biodiversity by putting a price on the environmental damage caused by companies.


The application of nano-technology is already seen in a variety of industrial sectors, including energy, aerospace, construction, transport and defence. Scientific uncertainty and public scepticism surrounding the use of nano-technologies are leading to increased scrutiny of the adequacy of existing regulatory controls.

Questions are increasingly being raised about the possible impact of exposure to nano-materials on human health and the environment. The commercialisation of nano-technology poses major challenges for environmental policy-makers and regulators. There are major challenges in establishing methods and instrumentation for detection, characterisation and analysis, completing information on nano-material hazards and developing methods to assess exposure to nano-materials. As chemical substances get smaller, their behaviours and characteristics may change, with certain nano-materials possessing properties not found in their bulk counterparts.

Regulatory efforts to control the use of nano-technology have been limited. At present there is no EU or UK framework legislation that is addressed specifically to nano-technologies. However, a wide range of regulatory controls are relevant, or potentially relevant, to such technologies.The UK government's current approach appears to be on a case-by-case basis in assessing the risks of specific nano-technologies and nano-materials.


Hogan Lovells' environmental lawyers can ably assist with both the most complex legal challenges and the day-to-day issues that must be addressed to maintain compliance and keep abreast of recent policy and regulatory changes. The team offers expertise in litigation, permitting, compliance counselling, regulatory and legislative advocacy, and commercial transactions' advice. The firm's lawyers have earned a reputation as effective negotiators. The team has experience with manufacturing, energy, transportation, chemicals, agriculture, and many other sectors. State and local governments and trade associations also turn to the firm to address their environmental issues.