Good Intentions? Four Ways in Which Any Business May Be Caught by Environmental Law – and Not Realise

Some businesses operate in a sector that they know is closely controlled by environmental regulations. For others, though, the requirement to engage with environmental law may be less obvious.

For many who find themselves on the wrong side of the law, sanctions can be heavy. The business and individuals within the business could face criminal conviction and, in a worst-case scenario, financial confiscation under proceeds of crime legislation. Even a civil sanction – such as a fixed or variable monetary penalty – can have a serious impact.

Of course, there is also the risk of causing environmental harm – something which, in my experience, the vast majority of responsible operators are keen to guard against.

Yet, for so many, they find themselves in difficulty because they simply weren’t aware of their legal obligations. In this article, I set out just a handful of ways in which any business could find itself at odds with environmental regulation.

1. Waste management

I write a lot about waste. Anyone who follows me on LinkedIn may conclude I’m slightly obsessed. All businesses produce waste, though, and very few fully understand the regulatory requirements. A big-name waste company may empty your bins but do you know where all your waste goes? Do you always recognise waste as waste?

Here is a couple of examples:

• A business was replacing computer and other office equipment and wanted to allow its staff to take the old kit, free of charge, for their own personal use. Before they took advice, though, they hadn’t appreciated that much of that equipment was legally classed as waste and had to be handled as such.

• Another business manufactured wood products. Every day, it generated off-cuts that it couldn’t use but which it could sell on to others for re-use. The off-cuts were legally classed as waste and, again, had to be handled as such.

From a sustainability point of view, there were a lot of positives in what each of these operators wanted to do. However, by not recognising that they were dealing with waste, they wouldn’t have complied with the regulatory requirements – such as their legal “duty of care” to take reasonable steps to ensure that waste is handled and disposed of lawfully, or other rules about specific waste streams, such as waste electrical and electronic equipment or waste batteries.

2. Waste Water

Disposal of waste water is another common issue. Maybe your business’ waste water goes straight to the public sewer, or maybe it runs through a package sewage treatment plant and then to a soakaway or drainage ditch. That’s ok then, surely? Not necessarily.

An environmental permit is often required to allow even treated waste water to soak into the ground or run into a watercourse such as a ditch or stream. There are exceptions – for example, for domestic type sewage, up to a daily maximum volume – but these are subject to strict conditions and certainly don’t apply to waste water from industrial processes or even commercial activities such as washing vehicles or other equipment.

Similarly, a trade effluent consent is generally required to let anything other than domestic-type waste water enter the public sewer. A charity car wash illustrates the point. A well-intentioned retailer organised a car wash in the car park of one of its stores, intending to allow the soapy water to run into the drainage system around the car park. They had to quickly rethink their strategy when they realised they would be breaking the law without a trade effluent consent from the local sewerage undertaker.

3. Water supply

Having considered where the waste water goes, what of the rules about where the water comes from?

A small business was advertised for sale, stating that it benefitted from its own water supply – drawn from on-site wells – and actively promoting its efforts to recycle that water. The business was genuine in its claims about recycling water but had no records for the volume of water abstracted from the wells – and was unaware that a water abstraction licence is generally required to abstract more than 20 cubic metres (20,000 litres) a day. Again, there are exceptions but subject to strict conditions.

Before the business sale could go ahead, monitoring equipment had to be installed to establish whether a licence was, or was not, required.

4. Green claims

As environmental credentials become increasingly important in business – valued by customers in their buying choices, by investors and shareholders, and by many employees – more and more businesses are implementing Environment, Sustainability and Governance (ESG) policies and making green claims about their products or services.

The Competition and Markets Authority (CMA) has become increasingly concerned about green claims that could be misleading, breach consumer protection law and harm other businesses through unfair competition. It is currently investigating green claims made in the fashion industry, in particular, and in the sale of household essentials such as food, drink and toiletries. There have also been some high-profile cases of action against misleading adverts and the EU is developing a Green Claims Directive which would require claims to be checked by an independent and accredited verifier.

I’ll be writing more about ESG policies and green claims in future articles but the sheer amount of official and public scrutiny means that it's critical that the most straight forward of assertions about a business’ green credentials are fully justifiable.

By understanding and properly engaging with environmental regulatory regimes, businesses can promote and profit from their environmental credentials. Reuse waste, recycle water, promote genuinely green products or services. Getting it wrong, though, can undermine some of the best intentions and put you on the wrong side of the law, potentially leading to criminal sanctions.