Report identifies main barriers to credible and efficient climate solutions

Report identifies main barriers to credible and efficient climate solutions | Insurance Business Australia

Environmental

Report identifies main barriers to credible and efficient climate solutions

Global law firm calls for robust governance and legislation

Environmental

By
Roxanne Libatique

DLA Piper teamed up with the Grantham Research Institution on Climate Change and the Environment at the London School of Economics and Political Science to release a report focusing on addressing challenges in climate solutions.

The report identified three main challenges in climate solutions:

financial misuse and diversion, including bribery, money laundering, misappropriation of funds, and tax fraud;
climate washing, including misleading investors, consumers, or the public regarding climate-related impacts; and
abuse of processes, including failure to obtain free prior and informed consent and conflicts of interest.

“We have identified corruption and integrity risks in emerging climate solutions in both the public and private sectors, highlighting the need for safeguards. The nexus between climate change and corruption is of increasing importance as we work towards energy transition, with high-profile international investigations revealing collusion,” said Natalie Caton, group head of Australian corporate crime, investigations, and compliance and ESG partner at DLA Piper.

How to address challenges in climate solutions

The report calls for robust governance and legislation to address corruption and integrity risks in climate solutions.

“With the federal government implementing a more robust anti-bribery and corruption framework in Australia, including the recently established National Anti-Corruption Commission (NACC), organisations need to ensure that governance and reporting are an accurate reflection of the organisational practices and culture,” Caton said.

Tricia Hobson, partner, litigation & regulatory, at DLA Piper, noted the significance of accelerating climate solutions in many forms, but highlighted the need for robust governance structures to deliver these solutions credibly and efficiently.

“This emerging challenge requires collaboration and engagement from regulators, enforcement agencies, legislators, and the private sector to address the abuses that impede the energy transition,” Hobson said.

Gowri Kangeson, partner, litigation & regulatory, at DLA Piper, shared the same sentiments: “The report found that while ambitious climate commitments are crucial, they must be supported by robust governance structures to ensure credibility. Improving governance requires complete buy-in from the board level down.”