Dec 7, 2023

To print this article, all you need is to be registered or login on Mondaq.com. On September 27, 2023, environmental law organizationClientEarth released a report highlighting the growing potentialfor legal risk associated with biodiversity loss in the agricultureand seafood sectors, the currently applicable legislation, and waysto help mitigate risk. In a statement released alongside the report,ClientEarth explained that legal risk in those sectors is aconsequence of a dependence on ecosystem services, such as rawmaterial, clean water, pollination and a regulated climate toproduce goods and services. According to the report, biodiversity loss in the seafood andagriculture sectors, biodiversity dependencies and negative impactscan lead to legal risks in various areas, including: Deforestation-risk commodities regulations.According to the report, the expansion of agriculture andaquaculture is the main driver of deforestation, forest degradationand biodiversity loss on land. Globally, deforestation and forestdegradation are also the second largest source of greenhouse gasemissions. The European Union Deforestation Regulation(EUDR) prohibits the import, export and subsequenttrade in the EU of palm oil, cattle, soy, coffee, cocoa, timber,and rubber, as well as derived products such as beef, furniture,and chocolate, to the extent tied to deforestation. The law tookeffect in June 2023, with companies required to comply startingDecember 30, 2024. Pollution negligence and nuisance claims.Pollution, including from plastic, pesticides and waste, is a majordriver of biodiversity loss and ecosystem degradation. Marineplastic pollution has increased tenfold since 1980, and plant andinsect populations are dwindling as a result of dangerous,non-selective insecticides. Legal risks may arise in several ways,according to ClientEarth, including from, for example, the use ofpesticides. Liability may arise under civil or local environmentallaws when the use of pesticides causes alleged nuisance or harm toneighboring properties or the health of the local population orenvironment. The increasing regulation of pesticides may alsoincrease companies' compliance costs. Misleading commercial practices. The EU UnfairCommercial Practices Directive (UCPD) prohibits misleadingbusiness-to-consumer commercial practices containing falseinformation or omissions that are likely to deceive the averageconsumer or prevent the consumer from making an informed buyingdecision. The UCPD, along with other EU-enacted or proposed laws(such as the Empowering Consumers for the Green TransitionDirective and the Green Claims Directive ), targetalleged greenwashing by companies in their consumercommunications. To avoid or mitigate legal risks related to biodiversity loss,the report advises agriculture and seafood sector companies andtheir investors to conduct appropriate due diligence to identifyand disclose their dependencies and negative impacts onbiodiversity, and any actions taken, in accordance with recentlyadopted and upcoming legislation. Earlier this year, the EuropeanParliament adopted amendments to the CorporateSustainability Due Diligence Directive (CSDDD), which requireslarge companies to identify, prevent, mitigate or end negativeimpacts on pollution, biodiversity loss and environmentaldegradation, among other areas. The final text of the CSDDD issubject to ongoing negotiations, but in order to help companiesmitigate the financial risks associated with biodiversity loss, duediligence obligations should explicitly include biodiversityimpacts. Taking the Temperature: As we have noted regularly, nature andbiodiversity are increasingly the focus of sustainabilitydiscussions across industries and sectors, as governmentalagencies, NGOs , investors and industry participants recognizethe risks that nature-related biodiversity loss and ecosystemdegradation pose. Litigation over biodiversity loss on land and inthe water is also an emerging area of climate-related litigation,as evidenced in suits filed by ClientEarth itself. In May, theorganization sued Cargill , seeking disclosure ofCargill's due diligence policies and procedures with respect toits soy operations in Brazil. The organization and others also sued French food-products company Danone earlier this year under France's Corporate Duty of VigilanceLaw. ClientEarth argues that Danone must develop an adequate planto reduce its production of single-use plastic, including socialand environmental due diligence measures across the company'sentire supply chain. The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.