Insurance 2021 - the year ahead
2021 will see regulators adopt a united front on climate change
As part of the Law Society’s Future Worlds 2050 project, we take a look at the legal implications of climate change risks.
In 2020, the Law Society’s Future Worlds 2050 project explored what emerging signals of change today might mean for the world by 2050.
Their research included in-depth interviews with experts and key thinkers across a range of industries to understand the influence of factors such as AI and technology, data and ethics, global political dynamics and the increasing call to attend to the critical issues of our climate. Subsequently, we were asked to bring a legal lens to climate change and provide an introduction to the areas of risk and evolving roles for, and demands on, the legal profession.
Climate change risks are risks faced by businesses due to factors caused by a changing climate. We consider the following risks in turn:
Physical risks – risks including impacts of extreme weather events, potential economic costs and financial losses
Liability risks – risks of lawsuits being brought against government, corporations and directors, for example for their failure to act on climate change or transition risks, or misrepresentation/ mismanagement of their purported action
Transition risks – risks arising from the process of shifting to a low-carbon economy and the loss of assets that are inherently linked to carbon-intensive production
We discuss the role that lawyers will play in assisting their clients in addressing, managing and mitigating these climate change risks and how the demands of this role will reshape the legal industry as we know it today. It is clear that lawyers will play a crucial role in the response to climate change over the next 30 years.