The Fine Print of Saving the Planet - 6 Legal Challenges for Sustainability Driven Companies

The modern business climate has gravitated towards eco-friendly policies and initiatives. However, the path may be challenging and filled with legal obstacles. How can your company navigate the regulations and evolving standards?

Here are six barriers for organisations to consider as they plan for the future.

1. Following Strict Regulations

First, you must follow the existing laws to avoid environmental penalties. For instance, Parliament passed the Environment Act 2021 to require more recycling and reduce plastic waste. The legislation enacted policies for reduced species decline and more consideration for nature in future developments. While helpful, these regulations can affect eco-conscious companies.

The Environment Act 2021 makes companies more responsible for end-of-life management, so they must take extra steps to minimise packaging and reduce waste. If your organisation has already enacted environmental policies, it could face another round of product design or material sourcing changes. Higher standards mean extra scrutiny for compliance and potential fines for violations.

2. Avoiding Greenwashing Penalties

U.K. companies must carefully consider their marketing content when making product claims. They could face severe penalties if their environmental policies are untrue. Challenges arise because companies must ensure their descriptions are accurate and evidence-based. Therefore, they may have to invest in independent verification to minimise liability

Regulators like the Advertising Standards Authority and the Competition and Markets Authority protect the public from greenwashing and other unfair practises. For example, the ASA said Anglian Water’sgreen claims failed to reflect its track record. The water company received only two out of four stars in its environmental performance assessment rating, but claimed improvements and green initiatives.

3. Overcoming the Costs

Sustainability is essential for the planet’s future, yet it comes with steep prices. Companies could face penalties for greenwashing or other improper practises, thus emphasising the need for compliance. However, business leaders must consider the costs when implementing policies and green operations. Regardless of your spot on the supply chain, the price tag can get high.

Imagine you’re a fleet owner trying to reduce emissions. While electric vehicles are enticing,they have high initial costs and could be less feasible with your capital. Your organisation may have to phase the transition unless the timeline is shorter. Manufacturers must innovate or purchase pollution control equipment and catalytic converters to ensure efficient cars, regardless of the power source.

4. Completing Certification Processes

Obtaining accreditation from environmental groups can be significant for business owners who want to stand out. However, the process can be risky if they fail to maintain standards and face accusations of greenwashing. If your company can’t achieve certification, experts say it could impact owners and developers because they won’t get to use financial incentives.

U.K. businesses desire the Carbon Trust Certification because it demonstrates a commitment to CO2 reduction. If you sell food or beverages, your company likely needs this accreditation for credibility. These certificates can take months or over a year to achieve, requiring extra resources. Problems could arise if you have a certification but others in the supply chain compromise your reputation.

5. Navigating International Operations

If you conduct business in other nations, you must consider international laws in your operations or incur violations and penalties. For example, an enterprise could source palm oil from another country and violate global commitments to deforestation and biodiversity.

Following international law is complex because there isn’t a single enforcer or unifying principle that every country abides by. While 195 countries signed the Paris Agreement, each country may interpret the legal codes differently. Before conducting business in another location, your company should extensively study the codes or turn to experts with experience in environmental rules.

6. Protecting Intellectual Property

Pushing the planet forward with better policies means developing new ideas and technologies. These innovations can propel industries forward, whether in construction or other sectors. However, issues may arise with intellectual property because companies weigh capitalising on investments versus helping the public good. Obtaining patents could be an expensive legal venture for organisations.

Smaller businesses may need help with patent acquisition because they lack the resources to obtain accreditation. From legal costs to enforcement, protecting intellectual property can be complex. For example, a British company could develop biodegradable plastic and file patents in the U.K. While it has protection at home, the invention could be vulnerable in the U.S. or other nations.

Solving Legal Challenges and Helping the Environment

A company’s path to sustainability is complex, though proactive leaders can chart a course forward. Businesses should develop a compliance programme and be aware of new environmental regulations. Employees may need training to understand U.K., EU or international laws.

Regardless, your organisation should communicate with stakeholders to ensure ecological responsibility.