The report, by the way, was written by an independent trio of experts: Christina Ross, manager of technical services at LaCroix Davis, Evan Mills, staff scientist at Lawrence Berkeley National Laboratory, and Sean B. Hecht, executive director of The Environmental Law Center at UCLA School of Law. Available now, it also will appear in a forthcoming joint issue of the Stanford Environmental Law Journal and the Stanford Journal of International Law. It's a well-written, well-researched piece, too, and it makes for some interesting, if not troubling, reading.
Notably, the paper focuses on the insurance industry, but it mentions various industries. The info is undoubtedly relevant to just about any organization.
So let's examine some of the legal risks associated with global climate changes outlined in the study: One potential scenario is that you're a service provider -- maybe a hosted application company, an Internet provider, or an outsourced datacenter. Your local utility loses power due to climate-change-related weather conditions, such as a major hurricane. You can't maintain SLAs for your customers, and you've suddenly got costly legal troubles on your hands.
"Uptime is everything for these companies, and there's going to be more power outages, more stress on the electrical grid, " Mills says. "If IT operators aren't prepared, they may cause financial injuries to third parties."
The authors do offer some mitigation for this scenario. Among them: developing a business continuity plan; searching for alternative energy carriers other than electric, which is "particularly vulnerable,"; and investing in demand-side energy management and on-site power.
Or think Enron, but instead of the CEOs and other higher-ups fudging the financial numbers, they're fudging the data about the company's environmental impact. "Directors and officers' actions (or lack thereof) in managing climate change risks may depress shareholder value, and their disclosures about climate change risks are governed by specific federal laws that may subject them to personal liability," the report notes.
This type of scandal also could leak out to the public, tarnish a company's reputation, and result in a drop in stock prices. Next stop: court.
Another potential legal threat: A company could find itself sued because its products (for the IT industry, a server, perhaps) are less energy efficient than those of its competitors, thus producing more GHGs. A plaintiff could argue that he or she was harmed by climate change due the product's design defects. The report notes that this would be difficult to demonstrate in court, but the company would still incur legal fees (and bad press).