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Carbon fuelling legal demand

Carbon fuelling legal demand

Corporations have sought out law firms to understand their legal obligations in relation to carbon emissions and mandatory reporting as the regulations come into effect this year. Martijn…

Corporations have sought out law firms to understand their legal obligations in relation to carbon emissions and mandatory reporting as the regulations come into effect this year.

Martijn Wilder, partner at Baker & McKenzie and head of their global climate change practice, said the newness of the legislation means there are no precedents to follow so companies are coming to the firm to work through the issues.

"I think the big issues which we have been dealing with are things like taking someone's corporate structure and working out what needs to be reported ... if [a company] hires contractors, are they liable for the contractors? Or is the contracting company liable for their own reporting? If they have franchises or joint ventures and other arrangements, who has responsibility for reporting the emissions?" he said.

Wilder said another legal and technical issue related to how to adequately measure emissions, because the legislation required 95 per cent accuracy, which was difficult to achieve.

Louis Chiam, partner at Mallesons and head of sustainable enterprises, agreed that his firm had become actively involved in advising corporations because the legislation was designed as "one size fits all" but if a business had an unusual structure it could make the regulations complex to apply.

Chiam said the provisions that hold CEOs personally liable for breaches of the legislation had "made clients sit up and take notice" and that companies wanted to ensure they would be compliant

"Because of the due diligence defence for the CEO liability, it makes a lot of sense for companies to ensure that their processes are thorough and auditable, because those will be important elements of bringing yourself within the safe harbour in the legislation," he said.

Corporations are required to collect emissions data and report for the end of the financial year on 30 June.

- Sarah Sharples

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