Insights from the Cross Border Criminal Law Conference 2023: Influencing the Corporate Conscience

The focus of these annual events, which have been hosted since 2018 (save for a break during the “covid years”), has traditionally been on international criminal law, a field in which we have a long-established reputation. In recent years, this focus has broadened to encompass other important, related cross-border areas in which we also have expertise, namely the fields of business and human rights, and environment, social and governance matters (ESG).

This year’s conference, “Influencing the Corporate Conscience”, focused on corporate criminal responsibility and the environment. The event began with a key note speech on ecocide, delivered by Professor Phoebe Okowa,  followed by two panel sessions. The first panel explored UK environment and supply chain issues with cross border relevance, while the second panel discused developments in international criminal accountability for environmental harm, in keeping with the theme of the key note speech.

In this blog, we consider the insights and key takeaways from panel one.

Panel 1: Environmental and Supply Chain Issues – the UK Perspective

• Louise Hodges (Chair): Partner, Criminal Litigation, Kingsley Napley LLP
• Catherine Higham: Policy Fellow at the Grantham Research Institute on Climate Change and the Environment, London School of Economics
• Lara Blecher: Shareholder Engagement Manager, Pensions and Investment Research Consultants (PIRC)
• Helen Morris: Partner, Dispute Resolution, Kingsley Napley LLP

The panel kicked off with a discussion on the proliferation and impact of climate related litigation, with Catherine Higham providing an overview of her work on the Climate Change Laws of the World Project. Catherine highlighted the massive growth of climate litigation  across the globe, as well as the increased focus on corruption in climate action, such as greenwashing (an area which has recently seen action from the UK Competition and Markets Authority, and raises wider regulatory issues).

Nevetheless, despite these promising developments, Catherine emphasised that  environmental law continues to suffer from local enforcement issues due to a lack of funding. She also pointed out that while regulators have started to step in, many have openly said they will not get involved with environmental issues. She concluded that in the absence of action from regulatory bodies we will continue to see action from civil society and NGOs to fill the gaps.

Lara Blecher spoke next, on how to directly engage stakeholders facing ESG issues. She drew on her experience working with PIRC, in partnership with the Local Authority Pension Fund Forum (LAPFF), in engaging with communities affected by two mining project disasters in Brazil, as well as the stakeholders responsible for those projects. These disasters had significant social and environmental impacts, and also resulted in loss of life. Lara explained how, amidst a slew of legal action in the UK and Brazil, she had worked with stakeholders to facilitate corporate ownership of human rights and ESG breaches. She explained how this direct engagement had led to a compelling and comprehensive report on mining and human rights, bolstered by commercial litigation which had added weight to the arguments raised, provided useful evidence and highlighted corporate governance red flags which had been missed.

Lara also outlined the increasing concern around joint ventures being used as a vehicle to avoid responsibility for ESG harms, which she had seen in the Brazil context.  In closing, she provided an insight into how shareholder resolutions can be used as means of ensuring accountability for ESG issues.

The final speaker was Helen Morris, who drew on her litigation expertise in acting for claimants and defendants in the area of reputation management. She explained how reputation risk can be a driver for change in the environmental context, noting how adverse media attention drawn by ESG issues in cross-border supply chains has a very significant impact on businesses, often forcing them into action (Boohoo’s experiences being a good example). She also explored how companies can best deal with reputational damage from ESG violations, and how – in some cases – companies might be able to bring a defamation claim (although this would not be straightforward).

Helen concluding by discussing what companies can do when ESG issues arise, and the importance of not denying or obfuscating from those issues, but taking steps to engage and address the damage.

Key takeaways

ESG and human rights compliance should be at the forefront of every company agenda. The panellists laid out how failure to implement adequate protections and policies can lead to an array of serious outcomes, including injury or loss of life, damage to the environment, expensive litigation and significant reputational damage. This has a direct impact not only on company stocks and shares, but also on potential future investment and business.

ESG and human rights litigation is on the rise, and both directors and corporates should be proactive in ensuring ESG compliance by properly auditing their supply chains and projects, across borders and at home. The best protection for all is prevention. However, where issues do arise, corporates should actively engage with regulators and investigators and not bury their heads in the sand.

Kingsley Napley has significant breadth and depth of experience acting in cases concerning corporate and individual liability for human rights and ESG harms, within the UK and in an international context. For more information, please do not hesitate to get in touch.

Keep an eye on this blog for insights and key takeaways from Panel 2.

FURTHER INFORMATION

For further information on the issues raised in this news post, please contact a member of our criminal litigation team.