Guest Blog: Why Sustainable Development Goal Obligations will fuel COP26 success

COP26, 17 UN SDGs & some professional development

Global goals to tackle climate change have long been set.  World leader declarations continue to echo across Glasgow and beyond.  So, has COP26 been a load of “blah, blah, blah” or can progress be driven through the converts to the United Nations Sustainable Development Goal (SDG) – more government officials, business leaders and other stakeholders joining the fight to keep 1.5°C alive?

In my experience before the 2020 Covid-19 lockdown, there was a real lack of education – both at school and at work – about the SDGs.  My discovery of these 17 goals, which range from hunger to sanitation, energy to poverty, has since had a real impact on my professional practice.

Before this first lockdown, social, economic and environmental considerations for most procurements and state contracts were notoriously tick box exercises.  I think this was because of an assumption that the applicable social, environmental and economic legislation would suffice.  However, this is evidently not the case as we all can see today.

What has become apparent to me working in the public sector for many years, is that the legislative duties of care and associated obligations have not been flowing down properly from the top of the chain to front line delivery.  And this exposes the vulnerable and protected groups to harm.

The Impact Opportunity

So, what is the benefit impact on the SDGs when related legislative obligation gaps are identified and closed at scale across industries, sectors, deal standard terms, etc? 

Let me put it this way ……huge.

Identifying the discrete principles and obligations of existing laws associated with the SDGs and drafting these into global and national deals and transactions offers enormous potential in driving real change.

Take, for example, the scenario of financing a company that manufactures plant protection products. 

When we consider how duties of care and obligations flow down to protected groups, this snapshot of sustainable development related legislation highlights the problems of unmanageability.

Note that the finance deal terms are likely to be that of the financial services lender. The liability for risk breach is likely to sit with the manufacturing borrower. But the regulations for environmental protection are likely to sit with the products for agricultural third parties. 

You can begin to see that there is much to clarify. A lot of information is required to ensure that SDG performance monitoring, breach detection, information disclosures, data collection and analysis, intellectual property, data sharing, etc are managed well during the finance term. 

Business agreements which adopt a similar approach as this finance agreement will avoid complacency to SDG obligations, in turn closing the gaps on risks.

Linking SDG obligations to deal conditions

So we have the legal agreement forming, and we know the legislation applicable to each party’s industry.  Assessing the nature of the deal, parties should be more mindful as to which of the 17 SDGs will or could be impacted. 

Take life above land (SDG15), for example.  In relation to the manufacture, use, storage, processing, filling, release into the environment and onsite transport of plant protection products concerning the placing of plant protection products on the markets, the legislative obligations and or principles relevant to SDG15 can be considered for deal terms shaping. 

The polluter pays principle is taken from international legislation, such as the Environmental Liability Directive 2004/35; national legislation, such as The Official Controls (Plant Protection Products) Regulations 2020; and government policy, including how the UK works with biocides after Brexit). 

By examining and drafting the “how” pollution risk relevant to the deal is managed, informed, regulated in law and policy, legal practitioners can now begin to look at this contract as the mechanism to keep all parties clean and responsible for SDG obligations over the deal life. 

Awareness creates more awareness.

Sustainable Development integrity ratings

The more SDGs are linked to a deal, the more obligations from existing laws and principles relating to those SDGs can be reviewed and effectively drafted into the contract.  This approach reduces complacency around the SDG related risks and offers opportunities to continuously improve on corporate sustainability integrity and credibility through reporting, accountability, performance metrics and financial / other deterrents.

In time, much like home property energy certificates, deals themselves will carry a sustainable development performance rating.

Scale impact on protected groups linked to organisation integrity status

The sooner large corporations adopt an approach to managing new and long-term existing deals with SDGs at the heart of risk consideration, the greater the beneficial impact on their own brand, provided they are not misrepresenting their status. 

The ability of any organisation to demonstrate its concerns and duties of care to the wider population, ecosystems, environments, economies, justice, security and position on SDG partnerships, the greater the impact to their brand strength.

The saying tomorrow never comes is true. The time to act is now. Staring at the face of your deals portfolio may just make you think how much more there is to be do for sustainable development transition. You may even have a house clean rather than a new build. If that’s the case, you should let the world know about it.

Sophie is an experienced complex transactions lawyer based in the UK specialising in data, digital and technology infrastructure for large organisations operating across the public and other regulatory sectors. 

Sophie cofounded technology company innov8law in January 2021 to bridge gaps between sustainable development obligations and major deals using software as a service with powerful machine learning technology. 

For more information about innov8law products and services, including investment opportunities, please connect with Sophie via https://www.linkedin.com/in/snewbould/ or email [email protected].

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