Private financial institutions are the new supervisors of environmental regulation. The courts’ approach is also changing

Regulations in the area of environmental law are constantly increasing, which means that sustainability is an increasingly important topic that directly affects individuals, companies and states. However, oversight of compliance with the new rules is no longer exercised only by environmental inspection authorities, but also by private financial institutions. The courts whose decisions directly affect the corporate and state responsibility for climate change have also adopted a new approach to this issue. Read about the most important events in environmental law in Q2 of 2021 and get acquainted with regulatory news that will affect the future of sustainable business throughout the European Union. 

The EU wants to achieve climate neutrality by 2050, then it will aim for negative emissions

The existential threat resulting from climate change demands that the EU as well as its member states heighten their ambitions and intensify their measures. This is reflected not only in the EU’s approach to the European Climate Law and in the constant collection and analysis of data (referring to carbon rates, for example), but also in a change of the judicial ruling practice. In a recent ground-breaking verdict, a Dutch court ordered a private company to adjust its activities with regard to the need for tackling climate change. 

Biodiversity has a key impact on the economy of individual states, more than half of the global GDP depends on it

Environmental protection has been an increasingly important society-wide topic, and the European Union therefore continues to prepare new plans and strategies. One of the news is for example a new action plan for zero pollution for water, air and soil aiming to protect the health of Europeans. In addition, the EU prepared a strategy in biological diversity which responds to insufficient protection of biotopes and species – not only ecosystems but also economies of states depend on biodiversity. Other news include the ruling of the Court of Justice of the European Union on a temporary cessation of operations of a coal mine and a report of the INCA project on the integration of ecosystem accounts. 

The topic of environmental protection is a priority for young generations, companies must adopt credible climate commitments

Addressing the climate change and environmental protection continue to be a priority for young generations. This trend creates pressure on companies which have to adopt sustainable solutions. However, it is not always clear who is to be responsible for the green transformation in companies – one of the favourites is surprisingly the legal department. However, transformation is not easy, and it is necessary to know how to set credible climate commitments and abstain from mere greenwashing. One of the ways is better cooperation and mutual support between individual sectors and companies. 

The EU has further specified the new rules for combatting the negative environmental impacts of single-use plastics

As the bans on single-use plastics start to take effect, the European Commission has issued guidelines clarifying the problematic aspects of this brand-new regulation. The pressing nature of the situation regarding plastics is confirmed by the European Environment Agency, which has published a report explaining that plastics are not only a problem of pollution, but also a problem of climate change. Their carbon footprint is too high and therefore in conflict with the zero-emission economy strategy. The textile industry accounts for a significant share of plastics use and will therefore be subject to fundamental legislative changes. 

Navigation through the Rules of Sustainable Financing will be easier, the EU prepared the “Taxonomy Compass”

Symbolically on the Earth Day, the European Commission introduced a robust package of new measures aiming to support sustainable finances. These included the first set of technical criteria describing which economic activities most contribute to the meeting of the EU objectives relating to climate protection. The EU Taxonomy is thus more specific. The Commission additionally prepared a proposal of the Directive on reporting on the sustainability of companies that is to expand the requirements for reporting. And the sustainability of finances in the past quarter was additionally supported for example by the Platform on Sustainable Finance that introduced a set of its recommendations on how to improve the taxonomy in the future. 

Green transformation continues, the Modernisation Fund announced new calls for facilities that need emission allowances

The European Union is aware of the importance of green transformation, and therefore provides new-old sources to its member states. Recently, the Just Transition Fund was approved, and it will provide help, with its EUR 17.5 billion, to coal-mining regions. In addition, the EU continues the LIFE programme which supports innovative environmental projects. And the Czech Republic is not lagging behind, it announces new calls of the Modernisation Fund for the modernisation of sources and technologies. At the same time, it is necessary to carefully monitor the public aid. For this reason, the Commission published the instructions by which it stipulates the conditions of the public support in relation to the system of emission allowances. As indicated by a new OECD tool, the public support often goes into non-environmentally friendly solutions such as fossil fuels. 

Legal News [June 2021]: the Constitutional Court commented on the conditions for withdrawal from the non-competition clause

In its judgment, the Supreme Court emphasised the difference between "professional care" and "due managerial care". The Supreme Court also ruled that in the case of disinheritance, reasons that occurred after the making of the deed of disinheritance are also relevant. According to the Supreme Court, when examining the continuity of the right to be entered in the Land Register with the existing entries, the status of the entry at the time of the application for entry is decisive. What other interesting judgments have we seen in the field of Czech law? 

Protected account – a shield against unauthorised asset seizures and debt traps

As a protection against unauthorised asset seizures, obligated persons can open the so-called protected account starting from 1 July. The protected account cannot become subject to seizure and shall be used to deposit financial resources that are not subject to seizure such as maintenance for children or unseizable salary minimum. The concept of protected accounts is supposed to be a solution of multiple seizures when the income of the obligated person is subject to salary deduction and the remaining amount is subject to another seizure – this time by ordering a receivable from the account. Let us have a look at how this new instrument will work.