Shipping Lawyers Expect More Climate Court Battles After Shell Ruling
Maritime attorney Gerald Morrisey was interviewed by ShippingWatch about how the increased focus on environmental, social and corporate governance (ESG) could affect the shipping world legally. ESG has recently become a hot topic in corporate board rooms and one that is on most companies' radar. Mr. Morrisey said that the drive to incorporate ESG practices is more of a corporate motivation than a legislative demand at the moment.
"It appears that in the U.S., corporate and/or social pressure is motivating corporate ESG practices more than legislative demand. The current presidential administration is taking a greater interest and initiative in ESG related matters (e.g., recent announcements of enhanced emission standards from federal buildings and homes, and renewable energy investments), but legislative activity is less strident," he said.
Shipping companies that lag behind with ESG strategies, both as far as implementation and execution, could experience commercial pressure and concerns, he explained. "Impacts from lagging on ESG matters are at present predominantly commercial concerns, e.g., shifting market dynamics, and potential increases in future regulatory compliance costs (e.g., like the recent vessel exhaust gas emissions rules compliance costs)," he said. "There is also the possibility of increased activist investor involvement and/or shareholder suits. For example, the recently reported ExxonMobil activist investor activity related to climate change."