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ESG and sustainability

Biodiversity and deforestation

Given its potential impact on climate change, biodiversity and human rights, deforestation is of global concern, with significant developments in the fight to stop illegal deforestation.

Multiple legislative proposals with a global reach have been introduced, seeking to ensure products linked to illegally deforested land worldwide cannot enter local markets. Significant commitments from the leaders of over 140 countries were also made at COP26, in line with the Glasgow Leaders’ Declaration on Forests and Land Use. For multinationals with complex supply chains, these changes will present a considerable adjustment.

The onus is on corporates to demonstrate that utilised commodities and manufactured products are not linked to illegal deforestation so clarity over supply chains is critical under a number of national and international laws. The wide range of commodities currently proposed demonstrates breath of the new proposals. As ESG issues play an increasingly prominent role, any non-compliance with respect to anti-deforestation legislation is significant for both society and business, with legal, financial and reputational repercussions.

Freshfields’ global team advises across the full spectrum of forest-risk considerations, including risk and governance frameworks, supplier due diligence, investor engagement, ensuring regulatory compliance and litigation mitigation advice. Given the cross-jurisdictional of deforestation legislation, Freshfields draws upon a global network to understand the position on the ground, creating joined-up business strategies that ensure compliance.

Client successes

The claim is the first of its kind – tying allegations of anti-competitive practices to biodiversity impacts – and is a test case as to whether competition law can be used by claimants as a tool to address environmental (including biodiversity) concerns.

While this company does not have a very significant CO2 footprint, its products and supply chains have an impact on biodiversity worldwide. Our task was to assess how strategies and legal arguments developed by strategic claimants in relation to climate change litigation could be used to pursue biodiversity litigation in a number of jurisdictions worldwide.


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