By Mary Beth Ayvazian, Esq.
The Boston Harbor Hotel was the location of a regional summit focusing on the impacts of climate change on all aspects of business. This all-day climate change summit on Friday, February 12, featured a speaker from the EPA, policy makers from the six New England states, and prominent business leaders. The speakers dished out perspectives on how businesses can position themselves to benefit from state and national energy and environmental initiatives.
The message of the day for businesses: Vision and values give a company a sense of direction, but long-term success depends on embracing sustainable business practices. Global climate change is accelerating and sustainable business will depend not only on being very finely tuned to these changes, but also being expert in understanding how they interact and tangibly affect our economy.
The US is lagging in the fight against climate change and may lose its place as a world power as a result of it. One of the most crucial battles the United States faces against climate change is its struggle for energy independence, public officials and private business leaders agreed. The U.S. must pull the reins on foreign oil for the sake of the nation’s national security. But energy independence also means job security, something weighing heavy on the minds of Americans as the national jobless rate continues to creep higher. “We’ve already lost our competitive advantage,” was the stark statement posited by Thomas King, CEO of National Grid, an international energy delivery company. In the U.S., National Grid delivers electricity to approximately 3.3 million customers in Massachusetts, New Hampshire, New York and Rhode Island, and operates the electricity transmission and distribution network on Long Island, serving an additional 1.1 million customers. Mr. King also said that the scientific debate on climate change “needs to end, and bold leadership is called for to move the United States forward in a sane march toward energy independence to catch up with China and major European countries.
Numerous participants commented that given the risks involved in new business investments, reliance on governments and regulatory agencies doing the right thing is not enough. They could fail. Or institute restrictions on commerce that are unfriendly to businesses. Companies need help in understanding greenhouse gas regulations and policies; obtaining grant and loan information for new energy and energy efficiency technologies; interpreting existing SEC disclosure requirements as they apply to business or legal developments relating to the issue of climate change; and in general, maximizing their opportunities while mitigating their risks.
In addition to legislative and administrative policy-making, companies need to be apprised of the judicial rulings in the climate change arena. Companies not paying attention to the courts and the potential impact on their businesses should think again as there have been a few important cases in the last few months which pave the way for the viability of nuisance claims relating to climate change impacts. In Connecticut v. American Electric Power, 2009 WL 2996729 (2d Cir. Sept. 21, 2009), the 2nd Circuit court allowed lawsuits to proceed against utilities that allegedly emit 10% of America’s man-made greenhouse gases. Under federal nuisance theories, the plaintiffs seek an injunction forcing the utilities to cap and then reduce emissions. The 5th Circuit similarly ruled in Comer v. Murphy Oil, 2009 WL 3321493 (5th Cir. Oct. 16, 2009), that Gulf Coast residents and property owners could sue numerous energy, fossil fuel, and chemical companies for Hurricane Katrina’s havoc. Although, we don’t yet know the eventual outcomes of these cases as an appellate decision that a complaint meets the low threshold for survival does not go so far as to uphold a verdict or injunction, a door has been opened, and companies should be looking to their own policies and compliance issues to mitigate against possible lawsuits that disrupt and cost thousands and thousands of hours and dollars to defend.
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