Key Takeaways from Energy Transition Forum
Energy Transition and Climate Disputes – Why Now? This relevant issue was explored at last week’s Energy Transition Forum organised by the SCC Arbitration Institute, the Centre for Effective Dispute Resolution (CEDR), the Chartered Institute of Arbitrators (CIArb), Westerberg & Partners, and Advokatfirman Delphi. At the Forum, three stellar panels discussed the basis for energy transition disputes, the intersection with environmental, social, and governance (ESG), and possible ways to mitigate the impact. We highlight some key takeaways below.
The program started with opening remarks by Caroline Falconer (SCC), who highlighted the significant increase in disputes involving green technologies at the SCC in recent years. Read about this and more in the SCC Report on Green Technology Disputes, 2022.
Thereafter, Wolf von Kumberg (Arbitra) emphasised the importance of addressing the dispute risks that arise from energy transition – an issue, which has not been at the forefront of public discussions until now.
In the keynote, Dr. Crina Baltag (Stockholm University) aptly pointed out that there is simply “no time to wind down” in the face of the global climate emergency. Recent studies indicate that the unprecedented surge in regulatory changes by States (including energy transition measures) is likely to be the leading cause of an increase in international energy disputes. This regulatory inflation is only expected to accelerate with recent developments concerning States’ obligations regarding climate change – such as the United Nations General Assembly’s recent declaration that the right to a clean, healthy, and sustainable environment is a universal human right.
The first panel consisted of Kai Uwe-Karl (GE Renewable Energy), Tom Melbye Eide (Independent Executive), Tasneem Azad (Kroll), Polina Permyakova (Delphi), and Jessica Crow (Arbitra), moderated by Wolf von Kumberg. The panel discussed the various areas of potential dispute risks from a private sector perspective. In addition to climate change claims brought on the basis of human and constitutional rights, there has been a growing number of domestic litigation wherein climate change actions are being brought on the basis of private law causes of action – such as the tort of negligence in the recent landmark case of Vereniging Milieudefensie et al v. Royal Dutch Shell.
The second panel included Mark Appel (ARbDB Chambers), Paul Sills (Arbitra), and Joe Tirado (Garrigues), moderated by James South (CEDR), focused on the perspectives of States and how they are responding to the energy transition. On the tricky question of what it really means to be “Paris compliant”, the panel suggested that Paris compliance comes from a state aligning itself with science and economics. Put another way, States should comply with international and Human rights regimes and look at the necessity of adopting what science and economics say are the best practices to achieve the goals set out in the Paris Agreement. The panel also stressed the importance of States taking an innovative approach to dispute resolution, such as investment mediation.
The final panel, Karl Mackie (CEDR), Elise Groulx (International Business and Human Rights Lawyer), Jillian Kirn (Climate Change Counsel), and Maria Fogdestam Agius (Westerberg & Partners), examined how energy transition interacts with the ESG framework. The panel touched on corporations' challenges when proving compliance with their ESG framework, especially in the continually changing regulatory landscape. The panel emphasised that compliance cannot be seen as a “tick the box” exercise, rather, it is essential to for corporations to properly understand their due diligence and reporting obligations.
See the full video broadcast down below.