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Rise of regulations sends sustainability shockwave

06 September 2023

The pace of legislatory change in the UK and EU makes the compliance environment ambiguous and difficult to navigate – we unveil what's on the horizon.

In many ways, the impending tsunami of sustainability related legislation may be viewed as a sign that the UK and EU governments are taking sustainability issues seriously. That may be positive, unless you have to try to implement it all. Then, we frequently hear from clients how bewildering the pace of change is and how they do not know where to start. 

If one considers the EU's work programme, it is clear that there is not so much as a thread of sustainably, closer to a river of measures flowing through a huge range of topics as diverse as waste; food durability indications (to reduce food waste); green claims; sustainable food systems which will regulate food green claims and govern food systems more generally; to packaging and extended producer responsibility; wider deposit return schemes and many other issues beside. The UK has similar but different work programmes. All of this before we even get into the topic of sustainability reporting required at EU or local levels, the financial businesses or the upcoming behemoth Corporate Sustainability Due Diligence Directive. 

It feels increasingly difficult to stay on top of what obligations are in force, what are coming, and when and how they will impact you. The pace of change has never been so fast and so relentless. Many will say it is good, many may also say this is too little and too late. However, as is the case in the UK, sometimes additional time is a positive thing in order to try and get a system that actually has a chance of successful operation. 

In the UK, while 2023 has been the year for many measures being adjourned, 2025 is likely to be a very busy year for sustainability issues and any other policy that the current government does not like. Time and time again over recent months we have seen policies about to come into force pushed back until 2025. The beleaguered Scottish Deposit Return Scheme (DRS) and the EPR scheme in England being just two examples. 2025 comes of course after the next election and these decisions effectively make these policies someone else's problem, given most relevant ministers are unlikely to be holding the same post at that time. In both these examples we have seen a masterclass of political head in sand as the clear problems and issues have not been addressed to allow the schemes to operate. 

Yet, the good news is that we do have a ban on single use plastic bags from October 2023 and voluntary food waste reporting, when everyone suggested it should be mandatory. Also, in October we will see the end of a consultation on the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024. Businesses will need to consider whether they are a producer with recycling information obligations. This is not a clear cut: you could be a producer if you are a brand owner or put goods into packaging, but is your packaging in scope?; and how do you determine packaging recyclability? The last question is easier said than answered, given the current and postcode lottery of recycling across the UK has got a little better. So the question asked in the consultation is: "Are the requirements for the provision of recycling information and packaging labelling clear?" The answer should really come with a resounding yes, but sadly, that's not really the case.

2023 has, however, seen a seismic shift in the approach to Green Claims and the risk for them will only continue to increase. The UK has not chosen to regulate, like the EU, the sequence of ASA decisions, including the HSBC decision last November or the Anglian Water decision (read more in our ASA Round-Up here) which saw ads that were factually true, but silent on other negative environmental factors, and thus rendering their advertising misleading. Even ads talking about work done by petrol giants on renewable sources were deemed misleading for not mentioning they also sell fossil fuels (more details in our insight here). The dial has shifted and huge care is needed for any form of green claim going forwards. While the UK is yet to overtly be as strict as the proposed EU changes, regarding claims based only on carbon offsetting being considered misleading, it would take a brave advertiser to run such a campaign in the UK. Clearly misleading ads should be banned, but the dial feels like it has shifted too far. Next up, we will see the Digital Markets Competition and Consumers Bill become law. What has this got to do with sustainability you might ask? Much more than you might think. It will recast the current consumer protection law addressing misleadingness and make it easier to prove offences, but that's not the worrying bit. Once law, the Competition and Markets Authority (CMA) will have the power to issue civil fines to a business that it – not a court – considers to be in breach, and those fines can total up to 10% of global turnover. The risk from claims and advertising generally is about to seismically shift – do you have your due diligence system in place ready?  

With so much change at the same time it can be difficult to always identify those changes that will most impact your business. So what can you do about all of this change? It is vital to stay up to date, and that is a full time job itself. Leveraging great publications and insights like this, as well as any trade association memberships can help you. Of course, your favourite trusted regulatory lawyer can also assist.

But staying up to date is unlikely to be enough. It is also crucial to ensure that your voice on these topics is heard. In part that can be delivered via a trade association, but of course that will be the aggregation of the views of the group. We would advocate that wherever possible, you also put your own business views forward and take part in any possible stakeholder engagement. By such approach only it is likely that your voice will be heard and that the policy might have a better chance of working in practice with less chance of joining the others in 2025. As daunting as this may sound, it has never been more important. 

This article was originally published by Footprint Media Group's and is available here.

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