Legal briefing |




Getting to grips with the myriad of environmental laws and regulations in so many areas, including contaminated land and waste, chemicals and plastics, and air and water quality, is a challenge for any business.

Although not currently dominating the headlines in the same way as climate change or natural resource concerns, failure adequately to address these environmental risks can result in significant liability and reputational damage. Increasingly stringent substance restrictions, as well as higher standards under environmental permitting, can make an industrial process or product redundant so it is important to keep on top of developments in law and regulation on the horizon.

Historical environmental and safety liabilities can affect the most economically-robust business. A well-advised board maintains steady oversight of the company’s environmental performance. 

The regulatory focus has over the last couple of decades been not only on producers, but also on their products, the chemicals they contain as well as end-of-life waste management and recycling.  The response to the crisis of plastics in the environment (and, in particular, our oceans) illustrates the circular nature of this challenge.  All businesses in every sector have some level of environmental impact.

Back to Climate change, environment and resources


Key issues
Contaminated land and development

Contaminated land and development constraints are governed by the Environmental Protection Act 1990 (EPA), sitting alongside local planning laws. These regimes provide a risk-based approach to the identification and remediation of land where current and historical contamination could harm human health or the environment. Proactive management of contamination risks begins with a robust set of operating policies to prevent the escape in the first place. Given the potential long-term nature of ground contamination and that the UK's contaminated land regime under the EPA provides for polluters, known permitters and future landowners and occupiers to fall within the liability group, adequate due diligence and contractual protections remain of upmost importance when acquiring companies and property.

For investors and acquirers, an effective due diligence process can help identify and mitigate risks associated with contamination incidents and accidents. Understanding where the primary liability for historic contamination clean-up falls is not always straightforward, particularly in the case of complex corporate groupings and commercial arrangements entered into since the contamination occurred. Legal arguments around liability for historic contamination should be carefully balanced against the potential for reputational damage caused by the perception of avoiding environmental responsibilities.

Brownfield (potentially contaminated) land presents opportunities for developers. Policy generally promotes new developments on such land as this often is the catalyst for remediation. The London 2012 Olympics, for example, brought about considerable regeneration and clean-up of heavily contaminated land. It is clear that future development permissions will be closely linked to contamination clean-up as well as clean air, water and protection of biodiversity requirements. The Environment Bill requires the Government to set, by October 2022, long term targets in these areas. It will be interesting to see how far these targets align with the EU's ambition, to be revealed in its "Zero Pollution Action Plan" later in 2021 under the EU Green Deal, which will similarly look to promote the protection of air, soil and water.

Hazardous activities, substances and chemicals

Hazardous activities, substances and chemicals are regulated under a range of international, EU and UK laws and regulations. The main chemicals framework, the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation, imposes obligations on manufacturers and importers of chemical substances. This complex piece of legislation provides a comprehensive transparency, data repository and substance restriction framework. Post-Brexit, the transposition of such a complex regime into UK law will be a major challenge, and the chemicals and manufacturing industry awaits clarity from the UK Government on the extent of its responsibilities. Chemicals and hazardous substance management is not just a matter for the chemicals industry; manufacturers of products and any business operating a green procurement policy will need to be mindful of hazardous substance content in the products they manufacture, use and distribute.

Businesses with exposure to hazardous activities, substances and chemicals face a heightened obsolescence risk: if substance X is to be banned on a given date (even with a 'sunset' period), without swift adaptation to the new regime, companies which manufacture or rely on that substance may run into difficulty. This risk requires a proactive approach to monitoring domestic, EU and international regulatory frameworks. Some businesses choose to go beyond minimal legal compliance and either establish their own restricted substances list, or operate according to industry or supplier standards. The complexities and sheer volume of legislation require careful internal management and robust due diligence on external supply chains and, for investors, any investment target in a relevant sector. 

In addition to REACH, RoHS and other product-related regimes, hazardous activities (where a business manufactures, stores or uses dangerous substances above threshold quantities) may be subject to site-level control and permitting (e.g. in the UK's Control of Major Accident Hazards Regulations 2015 (COMAH)). COMAH principally applies to chemical and petrochemical-related activities and fuel storage and distribution, but may also apply to other industrial activities. As the statutory regimes tighten following a number of human-induced natural disasters, there is growing impetus for all stakeholders to enhance their understanding of how the broad regulations impose a duty on operators to prevent accidents.

Employers are required to control substances which are hazardous to health and prevent or reduce employee exposure to such substances, in more serious cases under the Control of Substances Hazardous to Health Regulations 2002 (COSHH) but also under general employers’ liability legislation (the Health and Safety at Work Act 1974 and its implementing regulations). Employee health and safety remains a critical business issue, heightened by the COVID crisis. A poor health and safety record exposes businesses to reputational risk, and can reduce the value of otherwise robust ESG practices.

For investors, it is important to understand a target's reliance on all chemicals and potentially hazardous substances, as the substance control regime is extensive, and is not restricted to the well-known risks associated with, for example, ozone-depleting substances and asbestos.

Air quality and pollution

The UK continues to drive policy and regulation aimed at improving air quality and pollution. Climate change and air pollution are intrinsically linked and there is substantial overlap in the governance needed to meet these related challenges. The positive impact of the COVID-19 lockdown on air quality, particularly in cities and urban areas, was rapid and dramatic, and powerful images of clean cities may drive increasingly ambitious air quality targets in the years to come.   Emissions to air (including both air quality and point source pollution) in the UK are primarily regulated through environmental permits under the UK's Environmental Permitting Regime (EPR), or equivalent regimes in Scotland and Northern Ireland.

Air pollutants are regulated through bans on certain substances and specific restrictions for gases such as fluorinated gases and persistent organic pollutants. Businesses and individuals are also at risk from the statutory nuisance regime in the Environmental Protection Act as well as at common law, which protects against nuisance from air pollution (smoke, fumes, gases, dust or smells). 

Manufacturing, industrial and other combustion dependant businesses which fail to monitor and respond to the regulatory controls on air emissions (expected to ratchet up in the coming years), may find they can no longer operate or develop economically.

Local authority planning policy frameworks will take account of air quality and pollution targets. Improvements can be mandated at the stage of new urban and rural developments being permitted. A holistic approach, including alternative technologies, will be needed to improve current and future UK and EU air quality standards. The UK intends to set new air quality targets under the Environment Bill, whilst the European Commission will adopt a "Zero Pollution Action Plan" under the EU Green Deal.

The UK Clean Air Strategy, published in 2019, provides direction and standards on air quality and emissions from industry, transport, farming and domestic sources. The UK Government 25-Year Environment Plan (25-Year Plan), published in 2018, also set out a proposal for a new Clean Air Strategy. The UK has had a poor record on air pollution historically, so it will be interesting to see what level of ambition the new targets reach. Tighter controls on environmental permits seem likely to be a key tool in achieving air quality improvements, and may necessitate operational changes for businesses.

NGOs remain active in challenging the UK’s implementation of the EU law through Air Quality Plans in the courts, with several successful and high-profile cases taking place over the last few years.

Protection of water

The BBC's Blue Planet series in 2017 heightened public concern over the impact plastic was having on the world's oceans, rivers and marine habitats, with up to 80% of all marine debris consisting of plastic waste. Tackling plastic waste has been high on the agenda of many sustainable businesses since then, with dual benefits of reducing waste and water pollution. Heightened awareness and pressure on governments to act has been met by the implementation of new laws, initiatives and directives for the protection of water.

UK water protection legislation has over the last couple of decades been based mainly on the EU Water Framework Directive, which introduced a holistic approach to the management of the water environment (rivers, lakes, estuaries, costal-waters and groundwater).  The Directive required all surface water bodies and groundwater to at least achieve 'good ecological and good chemical status' by 2015 (unless there were grounds for derogation). Governments and businesses will need to consider long-term planning to meet the continued challenges to water supplies faced as a result of climate change, population growth and pollution to finite water resources. Climate adaptation measures for many businesses will be focused on the extremes of drought or flooding.

Environmental permits are required for any activity discharging substances to surface or groundwater under the Environmental Permitting Regulations. Businesses should take note that it is a criminal offence to cause or knowingly permit any polluting matter to enter controlled waters (expect under authorisation of an environmental permit). There are additional standards for heavily-modified and artificial water bodies and further standards legislating for protected drinking water source zones, habitat protection areas and recreational waters and nutrient-sensitive areas. 

As illustrated in the dry summer of 2018 in the UK, businesses reliant on water abstraction licences can expect regulatory changes designed to ensure the continuation of an adequate supply of safe and clean water.

The Environment Agency has recently launched a National Framework for Water Resources,  a long-term plan to meet the water supply challenges which are likely to occur as a result of climate change and population growth. Framework initiatives aim to reduce demand, halve leakage rates, develop new supplies and meet water demand by moving supplies to regions most in need.  The framework will be implemented through the collaboration of five regional groups designated to promote plans for specific individual areas. This, along with other domestic initiatives, demonstrate a significant step in the right direction for sustainable water management and the overall aim to ensure water security in the UK.

Compliance and permitting

Environmental permitting remains a key instrument for controlling and, over time, reducing industrial and business impact, facilitating compliance and promoting the development of alternative technologies as part of an overall sustainability governance agenda.  In order to mitigate operational risks associated with these permitting regimes, operators should be aware of the procedures required for obtaining, maintaining and reporting under the environmental permitting legislation.

In addition to permitting, there is also a myriad of wider environmental and safety obligations with which businesses must comply. To meet these various permitting requirements and compliance regimes, material expenditure may be required – in some cases, the level of financial burden may force the cessation of operations. Sustainable businesses need to know and monitor these requirements and plan accordingly.

Numerous commercial and industrial activities require an environmental permit under the UK's Environmental Permitting Regulations (EPR).  The EPR provides a central framework for permitting activities which impact land, water and air as well as waste management.  In short, an EPR environmental permit is generally required for a regulated facility or activities which discharge (or risk releasing) substances into the environment. 

There are a number of additional EHS regimes, which control the manufacture, transportation, use and storage of hazardous or radioactive substances, the extractive industries, sewerage discharges, specific greenhouse gas emissions and other dangerous activities.  The energy, utilities, healthcare, petrochemical, transport and other regulated sectors also have their own permitting and licensing regimes.

Multiple UK regulations in this area create statutory liabilities for environmental damage and safety incidents. Most carry criminal penalties, with directors at risk of concurrent liability.

Given the challenge of tracing liability for environmental harm, many UK regulations cast a broad net with regard to potential liability groups. In relation to contaminated land, for example, the authorities will try to identify those who 'caused' or 'knowingly permitted' a breach, but ultimately liability might fall on current or future occupiers of a property. So, although the UK adheres to the "polluter pays" principle, the reality can be more complex.

Sustainable businesses will want to consider their obligations beyond mere legal compliance. The UK has long relied on the EU for much of its environmental control frameworks.  Post-Brexit, although the status quo may be maintained in the short term, divergence is expected longer term.  For example, the UK has yet to confirm it will maintain the Best Available Techniques (BAT) process. 

Given the often cross-border nature of environmental damage, territorial divergence on standards and controls will make environmental management increasingly difficult.  When faced with these challenges in the past, businesses have often taken a 'race to the top' approach.  Businesses are advised to consider setting their operations at the highest current standards, even if short term gain can be found in relocating to regions with lower environmental controls.

Biodiversity, habitats and wildlife

Given the significance of biodiversity, habitat and wildlife protection to the environmental agenda, this is no longer simply a matter to be dealt with by governments. Sustainability from the perspective of biodiversity is inextricably linked with natural resource use. Reducing over-consumption and ensuring supply from renewable or sustainably-managed sources must be a key sustainability objective. There are inevitable costs associated with some biodiversity-friendly policies, at least until competitive pressures start to edge out those businesses which are unwilling or unable to follow suit.

There is a plethora of rules on the protection of biodiversity, habitats and wildlife in the UK; some may be species- or area-specific while others have more general application. Natural England (a UK conservation agency) has a mandate for managing national reserves and enforcing the rules on protected sites.  Due diligence processes should determine whether a target's assets or activities impact on sites of special scientific interest (SSSI), areas of outstanding natural beauty or other areas subject to protections (such as the world heritage designation).

Rules for the protection of biodiversity, habitats and wildlife will most often directly impact businesses seeking to develop existing or new land or projects during the planning process. An Environmental Impact Assessment will need to take account of any wildlife specific to the region, with several species, such as bats and newts, enjoying a level of legal protection capable of causing significant delays or costs to projects.

The Environment Bill will introduce a range of measures designed to improve biodiversity, including strengthening the duty on public bodies to conserve and enhance biodiversity, measures to protect biodiversity via the planning system, targeting illegal tree-felling and provision for new, enforceable Conservation Covenants to protect land, despite changes in ownership, and conserve it for future generations.

Meanwhile, under the EU Green Deal, organisations are expected to commit to action goals beyond legislation; the proposals target very direct biodiversity goals which will also reduce carbon, such as tree planting, nature regeneration and promotion of urban green areas. The EU's action plan also includes a new roadmap on minimising the risk of deforestation and forest degradation associated with products placed on the EU market - controls include enhanced mandatory labelling, due diligence and verification schemes.

Overview of relevant law and regulation

This is a heavily-regulated area, with detailed, complex and often overlapping regimes. Legislation, controls and guidance prior to Brexit were primarily adopted under an EU framework, with around two-thirds of the UK's environmental law originating from Brussels, which makes our exit from the EU particularly complex and challenging. Brexit will inevitably have an effect on the continuity of the UK's environmental law. As the Trade and Cooperation Agreement (TCA) did not commit the UK to tracking EU environmental policy in the future, how far the Government will choose to diverge remains to be seen.

Following the end of the implementation period on 1 January 2021, it is likely that there will be at least a period of parallel application of retained law, before any divergence begins. As part of the level playing field provisions of the TCA between the UK and EU, both parties commit to the maintenance of certain national standards, including in relation to environmental protection and sustainable development. The enforcement mechanism which underpins the level playing field provisions under the TCA may constrain the UK's ability to diverge significantly from EU standards, and as one of the stickiest points in the negotiations, it would be no surprise if the EU chooses to keep a particularly close eye on the UK's activities in this area.

Given the level of environmental control through the regulation of product design, transport, sale, use and disposal, even post-Brexit, it seems likely that the European Union's environmental policy will continue to have a major impact on the UK. As the European Commission moves forward with the implementation of the EU Green Deal (a holistic strategy to achieve carbon zero by 2050, covering issues such as pollution, sustainable transport methods, agriculture, fisheries, forestry and food), it will be interesting to see what effect this will have on UK policy and law. The UK has its own net zero commitment in the Climate Change Act 2008 and an outline plan for how to get there in the Ten Point Plan for a Green Industrial Revolution.

Risks and opportunities


Unlike some sustainability issues which are driven more by policy, guidance and voluntary programmes than established law, environmental laws carry a significant risk of enforcement action as well as civil or criminal liabilities. Enforcement notices, site closures, injunctions and court proceedings can all bring projects to a halt, in addition to very significant fines, remediation costs and, in the worst cases, criminal sentences.

Remediation costs for environmental problems can surpass the level of fines imposed by the regulator. The continual increase in environmental controls around industrial activities or products and chemicals allowed onto the market means that even financially-sound businesses may run into difficulty as a result of environmental issues.

Interest in the environmental agenda, driven by consumers, NGOs and government bodies, carries the risk of increased media scrutiny and reputational damage for those which fail to keep pace.

The UK's withdrawal from the EU raises a number of challenges in relation to a consistency of approach to environmental regulation across Europe. If the UK chooses to diverge from EU regulations, there will inevitably be increased compliance costs for cross-border businesses. 

The longer term risk is that industries and organisations who do not stay abreast of environmental regulation may fall behind as viable targets for investments or re-generation projects. Increased disclosure obligations around companies' environmental impact should be a strong incentive for companies to meet their compliance obligations.

Best practice

Best practice with sustainability policies will not be "one size fits all" when it comes to environmental issues.  Instead, they should ideally reflect an intent to improve a company's environmental impact, whether at a production or consumption level. Relevant considerations include:

  • ensuring that environmental policies are fit for purpose. These should reflect both current environmental legislation and future developments to mitigate against any actual or potential liabilities, and possible constraints on future operations
  • when investing in or acquiring new businesses, assets or projects:
    • diligencing the extent of the target/project's environmental impacts, the existing level of compliance and anticipating future compliance obligations (and associated costs)
    • considering an indemnity, warranty or other contractual or insurance package to provide protections on environmental risks
  • keeping pace with ongoing changes to environmental, permitting and planning laws which may affect business operations
  • considering voluntary measures which could be adopted internally to promote realistic environmental goals and ensure better environmental awareness across all upstream and downstream business operations
Our work

We help our clients to manage environmental risks proactively through environmental policy development as well as wider compliance and sustainable programmes, ensuring they not only comply with current requirements but are proofing their business against future challenges.

Our dedicated full-service Environment Law Group draws upon extensive knowledge in all relevant areas, including contaminated land and development, hazardous substances, pollution, compliance and permitting, industrial disease and energy efficiency law, to assist clients in navigating the complex regulatory landscape.  We are also there for when things go wrong. From regulatory enforcement, disputes, and crisis response, our experts work across environmentally-sensitive sectors. A strong track record of engaging with the UK Environment Agency and other regulators brings a deep insight, which in turn allows us to help businesses make informed and balanced decisions. 

We are also increasingly supporting companies in sectors which have historically had less environmental impact, but now recognise the need to adapt and prepare for the future.

Recent work

Recent examples of our work in this area include advising

Contacts and further reading
Read Doug Bryden Profile
Doug Bryden
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John Buttanshaw
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