Brexit could ‘weaken’ business standards for recycling and air quality

The UK's impending decision to leave the European Union (EU) could lead to a "weakening of domestic standards" that fails to incentivise businesses to improve recycling rates and tackle air quality issues, a new report has found.

The Brexit: Assessing the ESG Implications report from investment researchers Sustainalytics has analysed the impact that leaving the EU could have on corporative environmental and social governance. The report found that while policy changes are unlikely to influence businesses’ environmental performances in the short-term, both air quality and waste reduction commitments could be ignored by companies due to a change in existing legislation.

“For seven of the nine ESG issues we examined, including climate change, human capital and executive remuneration, we judge the probability of a policy change to be low or moderate. In many cases, this is because the relevant norms or EU directives have been enshrined in foundational UK laws that will be difficult for the UK government to overturn,” the report states.

“In other cases, domestic UK standards exceed what is (or was) required under EU Directives, as with product quality standards, executive remuneration and the Corporate Governance Code.

“However, on two issues, recycling and air pollution, there is reason to believe that the Brexit could lead to a weakening of domestic standards, which could blunt the incentive for UK firms to develop programmes in these areas.”

Brexit backlash

The report warns that once article 50 has be invoked, and the UK officially takes steps to leave the EU, it would no longer be required to comply with the European Commission’s Circular Economy Package, which established a 65% recycling target for municipal waste by 2030. The report noted that recycling company SUEZ is expecting the UK’s recycling policy to stall; after the company previously told edie that the decision to leave could create a “void” at national policy level.

The report also warns of a “slowdown” in business orientated recycling policies, noting that the UK’s stagnant household recycling rates – which are already lagging behind EU recommendations – could suffer further, as smaller businesses and organisations distance themselves from poorly incentivised policies.

In regards to air quality, the report outlines the UK’s continuous struggle to comply with the EU’s Ambient Air Quality Directive, which has already led to numerous court battles. With the UK struggling to alleviate air quality issues as part of the EU, the report claims that the Brexit could allow existing legislation to be repealed and air quality standards to be relaxed.

The repercussions of the decision to leave the EU are yet to fully rear their heads, but that hasn’t stopped a political reshuffle from taking place. Ian Duncan, the only Conservative MEP for Scotland, tendered his resignation just hours after it became apparent that Britain had chosen Brexit.

While businesses and organisations have pledged to work with the current, and increasingly fragmented government, to create a political landscape that will enable the UK to thrive outside of the EU, top UN chiefs are already warning that the UK’s commitment to the historic Paris Agreement could now be in doubt.

Pollution projections

The potential relaxation of air quality standards follows on the heels of new International Energy Association (IEA) report, which has claimed that around 6.5m premature deaths across the globe each year can be attributed to air pollution.

The report highlights that countries will have to overcome a delicate balance between public health and the reliance on the energy sector – which has been cited as the largest source of man-made air pollutants.

Matt Mace

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