The realisation that the environment was set to become an area of business risk in terms of liability as well as a business opportunity was the catalyst for the professional services firm committing to this practice area.

PwC Legal will be releasing a forecast on environment law next month and predicts it will be a practice area of significant growth as the world wakes up to the threats posed by environment degradation — in particular climate change.

“If you thought 2006 was a big year in terms of environmental issues, 2007 is going to be ten times bigger, largely because the issues that are out there are causing concerns around constraints on productivity and restraints on the economy,” Andrew Petersen, partner of the environment group said.

“The environment is no longer an emerging area for Australian business to be worried about their performance — it’s a critical area that they are beginning to put serious management time into addressing,” he said.

Petersen predicts that climate change, water and land use changes, particularly as they relate to access to affordable land and sustainable development, will be in the spotlight in coming years.

The problem for Australian businesses when looking at these issues is a lack of regulatory predictability.

“Certainty is not something that business needs all the time but it does want a forecast of where regulation is going. From an Australian business perspective that is a critical issue. I think business needs to help government understand what predictability needs to look like,” Petersen said.

Adding to the difficulties faced by business is disharmony of environment and planning legislation across jurisdictions.

“The cost of a national business with operations in different states having to deal with a variety of environmental laws and regulations at local and federal levels is bamboozling for most businesses. This can either lead to apathy, inertia or frustration in trying to ensure effective compliance,” Petersen said.

Unwillingness on the part of the Federal Government to lead the way on environmental issues hasn’t stopped businesses from seeking advice on self-regulating and taking advantage of new financial markets that are opening up now that a price is being put on the environment.

“Business is undergoing its own transformation to address this new risk profile, and in doing so, while addressing the compliance issues, business is also looking at the opportunities to identify and develop new products and services in climate change, water and water infrastructure. Business is looking to have a first-mover advantage and to demonstrate to investors, regulators, the community and customers that they are socially responsible,” Petersen says.

In addition to offering traditional advisory and advocacy service to clients, PwC Legal’s environment practice also offers an environmental assurance service.

“I guess there is a marked distinction between our practice and other environmental law practices — our environmental assurance practice is fairly unique because it works with our audit colleagues at PwC in looking at legal implications of environmental liability on the balance sheet,” Petersen says.

While environment law is no longer in its adolescence, Petersen says a lot more debate will need to take place to come up with innovative ways to ensure the economy will continue to operate at the level of effective productivity it has in the past without degrading the environment. Being active in debates on future environment laws and policies is something PwC Legal says is of benefit to its clients.

“One of key aspects of doing what we do is to be engaged in the debate, whatever that may be, and in the environment area we see it is an important aspect of being able to deliver effective advice to a client by being involved in the issues. So I, for example, sit on the board of Environment Business Australia as a director and we also have as part of our group Sean Lucy, who sits on the Business Council for Sustainable Energy; and that’s part of our engagement with business and with government on certainly being part of the influencing of environmental law and policy,” Petersen said.