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With its multiple facets, the legal side of decarbonisation may not be highly visible, but it is strategically important – starting now

15 July 2020 | Paris
Legal Briefings

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WITH ITS MULTIPLE FACETS, THE LEGAL SIDE OF DECARBONISATION MAY NOT BE HIGHLY VISIBLE, BUT IT IS STRATEGICALLY IMPORTANT – STARTING NOW

The challenges of climate change seem to be taking a back seat to economic stimulus. However the process of decarbonising the economy should begin to pick up steam given the ecological origins of the health crisis, the call from 12 countries (including France) to make the Green Deal “a roadmap to responding to the economic crisis”, and the publication on 23 April 2020 of the decree adopting France’s low carbon strategy for achieving carbon neutrality in 2050.

Over the last months, legal provisions from multiple sources are converging toward this larger reality and have created a legal framework. The regulatory approach taken in France plays a significant part here, although very similar measures do exist in a number of European countries.

Construction and transportation are the two most affected sectors. At their intersection, the sale of new fossil-fuel powered light duty vehicles is scheduled to end in 2040, as mandated in the 24 December 2019 Mobility Law. The law also strengthened the obligation for companies with fleets of over 100 vehicles to acquire low-carbon vehicles when replacing the fleets, and expanded the obligation to install battery charging stations in car parks that are part of other buildings.

Reducing a carbon footprint also means reducing CO2 impact across the product life cycle. The 10 February 2020 Law to Discourage Waste and Promote Circular Economy sets out rules for prolonging the life of consumer goods and institutes social and environmental labelling, initially on a voluntary basis.

A company’s overall carbon footprint is affected by the source of the power it consumes. With some of France’s nuclear capacity scheduled for mandatory closure by 2035, the shift to renewables will be a question faced not only by larger consumers. Those that have already taken advantage of support measures to establish renewable power plants are now focused on concluding purchase agreements directly with producers (corporate PPAs) in order to secure renewable electricity and certificates confirming the power source (referred to as guarantees of origin).

Failing to grasp this new situation would be a dangerous trap for companies to fall into. In addition to making sure they do not miss out on potential new wellsprings of growth, corporate executives must include social and environmental factors in their decision-making, as indeed they have needed to do ever since passage of the 2019 PACTE law.

All this means that in addition to mobilising their legal teams, it is now a matter of major strategic importance for all companies to anticipate and incorporate these new standards in their future plans.

Original source: https://www.agefi.fr/corporate/actualites/hebdo/20200423/volet-juridique-decarbonisation-l-economie-enjeu-297404

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