The lawyer and the challenge of sustainability

Sustainability is a must to do for the Planet and ourselves, clarity and transparency define the road to make our lives actually sustainable: an article by Mario di Giulio.

Posted jeudi, juillet 13 2023
The lawyer and the challenge of sustainability

Just like any other professional, the lawyer is subject to the whims of the current moment and may have to reshape their skills to fit the times: this is a continuous challenge but also something that forces us to train and grow and, thus, ensures the legal profession remains fascinating for those who never want to stay still.

For sake of clarity, I want to recall some examples from recent history.
At the end of the nineties, those who were working for big companies, where the use of software had high relevance, were required to insert provisions into contractual agreements to tackle the millennium bug, i.e. the risk that the computers and software systems could not process dates beyond 1999.

As in the middle ages, ten centuries before, three zeros issues agitated many souls, who then just as two decades ago feared a cataclysmic event, or even Armageddon.  The year 2000 came and passed without any such happening. Much ado about nothing (even if many contended that  the “ado” prevented the worst from occuring).

Then came the years of the mooted Italexit.

For those who do not remember that time, it has since been replaced by Brexit in the general European consciousness, it is worth remembering that  from 2009 to 2014, financial operators once again used the acronym PIGS (Portugal, Italy, Greek and Spain) coined in the nineties, and the modified PIIGS (adding Ireland to mix in the wake of the great recession).

These acronyms were meant to indicate the countries whose public debts were more exposed to a risk of default and the consequential risk that their economies could be pushed out of the Euro currency system.
At that time, as a financial lawyer who often worked for public entities, I had to negotiate clauses regulating the consequences of a possible exit by Italy from the eurozone, under pressure from young bankers scared by the specter of this scenario.

Recent history has of course taught us that a real risk was the possibility that a nation could voluntarily decide to leave the EU, rather than be booted out.

Ironically, the nation exiting was the one whose lawyers and bankers were more worried about the exit of other nations from the EU system (even if, in the UK’s case, the Euro currency was not concerned). Many firms and corporations then moved their offices to one or more of the PIIGS in order to continue to be able to render services in those countries as well as in the other EU member states under the European Union legal schemes.

Nowadays the big trend is sustainability.

As a preliminary consideration, I need to underline the fact that sustainability is not an option or a simple fashion but an absolute necessity if we want to have a planet fit to live on.

The point is how the issue is dealt with, because if the word “sustainable” is allowed to be used in all circumstances, even in matters where nothing or very little is sustainable, the risk is that the word becomes meaningless and that is a risk that we cannot take. Sustainability is our main key to ensuring a future for coming generations.

But what is really happening?

We need only take a look in our own backyard. In Italy, for example, our Corti dei conti (the court in charge for the public expenditure) has introduced the principle that debt borrowed at any given moment must not have an impact on future generations who will not benefit from the loan. In the meantime, our lawmakers propose pension policies that may affect the youngest generation’s possibility to have a pension when they retire.

Furthermore, limiting our analysis to the public sector, we read press releases issued by public entities which claim that they have issued bonds for sustainable projects, but those who know the mechanisms of public finance also know that when the money reaches a public entity there is no separation in connection with the envisaged purposes. In this way, the money borrowed for a green project may give way to other money for projects that are not green. 

This does not mean that this kind of financing is not good, but observers and journalists who act as cheerleaders for these initiatives should consider the whole context and should require public entities to explain precisely how they intend to tackle these issues. It is sufficient to think of the following: how useful is it to take out a green loan for a solar plant, if the money to needed to repay it comes from the taxes that could be used for public transportation or schools? 

This is why strict policies should be claimed by public opinion, and a high bar for praising any corporate sustainability issues.

If we shift the focus of our talk from the public to the private sector, one need only think about what is happening in the fashion industry, often erroneously accused of being the most polluting (thus diverting public attention from what happens in other industries, such as transport).

Every time a brand claims to use organic textiles, recycled materials or biodegradable materials, almost every newspaper praises the initiative. But nobody wonders whether the organic textile is diminishing the supply of water to local populations, whether the recycled materials are producing more greenhouse gas emissions because of their manufacture and transport. No one asks how biodegradation occurs, whether special action is needed in order to be effective, or if biodegradation will acidify the soil where materials are landfilled.

So, how can lawyers help in the ecological transition and in achieving true sustainability? The famous Italian law professor Franco Cordero once wrote: for the jurist their word means everything (per il giurista la parola è tutto) and, therefore, we should take more care of words we use and when we use them.

We should change once again our approach and pursue sustainability in our actions.

We, as lawyers, are used to getting to grips with outstanding matters in order to find legal solutions.

In the sustainability challenge, we should help and assist the parties to make and find correlations of any choice with all the other aspects of a case so that they could also avoid risks associated with greenwashing, which sometimes are not intentional. We should also clearly distinguish what is just a declaration of a principle from a principle that can legally be enforced.

We should write clearly, without the temptation, often ceded to in the past, to borrow styles and methods from other jurisdictions that do not have a legal framework that may clarify the positions of the parties.
It is not sustainable, from a logic perspective, to have an agreement where there are 20 pages of definitions and five of agreements and which only a lawyer could understand.

This is my opinion: given the general principle recognized in all jurisdictions that ignorance of the law is no excuse (ignorantia legis non excusat), it is not a good law or contract that requires the presence of a lawyer to be understood. 

Despite these common-sense considerations, one need only look at the taxonomy that the European Union is adopting covering ESG to understand that clarity is not the priority (maybe because of interference from various lobbies).

This carries the risk that sustainability will be a sort of cat in a dark night that nobody can say for sure is gray or white.

So this is my opinion on how lawyers may face the challenge of sustainability: full analysis of all the issues, supporting institutions and clients to identify needs and solutions, clarity in the drafting in order to exclude, or at least limit, to the widest extent possible any vacuum.

It is for this very reason that I co-founded The Thinking Watermill Society, a non-profit organization whose purpose is to share ideas and build bridges between academic studies and the people who live their lives under the decisions that governments make, themselves under the influences of academics and lobbists.

We try to achieve these goals through roundtables and conferences, articles and books, and sometimes even through graphic novels, such as the Flamingo Rosie Verde, written and illustrated by Jessica Luer, an expert on sustainability, to show in simple words and images how to achieve a better planet.

Sustainability must be synonymous with clarity and transparency. Excessive use of the word and its misuse can only have a negative effect on the Earth. When it comes to sustainability, simplicity is key.