South African environmental law is changing how climate change is factored into environmental authorizations (EAs). Recent court rulings are highlighting that climate change must be considered, especially when it comes to fossil-fuel developments. This shift aligns with the Draft National Guideline for considering climate change in EA applications, which is set to become mandatory once finalized.
The Legal Landscape
Under the National Environmental Management Act (NEMA), applicants must justify the “need and desirability” of their projects. This requires a balance between current economic needs and future sustainability. In 2017, the Department of Forestry, Fisheries, and the Environment emphasized that climate change commitments should be central to this assessment. Climate considerations aren’t standalone; they must be weighed against factors like economic development and energy security.
Recent Court Rulings
Two recent rulings—Green Connection and South Durban Community Environmental Alliance—highlight the importance of thorough climate assessments. Both courts found that neglecting climate impact in EAs can render them invalid. For example, in Green Connection, the court ruled against TotalEnergies for failing to adequately address greenhouse gas emissions in its environmental report. It stated that climate considerations should begin during the exploration phase, not just at production.
However, the Supreme Court of Appeal has agreed to review whether these climate assessments should include Scope 3 emissions during the exploration phase. This uncertainty creates challenges for companies in the petroleum sector, as they must navigate new legal expectations alongside existing regulations.
The Ongoing Debate
The debate continues over whether Scope 3 emissions, which consider the full lifecycle of fossil fuels, need to be assessed at early exploration stages. In some cases, like the UK’s Supreme Court ruling, the necessity of such assessments was upheld, but it focused on a production phase that guarantees emissions. In contrast, the exploration stage is often uncertain, making it harder to project emissions accurately.
Corporate Responsibility
These developments impact corporate governance in significant ways. Directors are increasingly held responsible for managing climate risks in their decision-making. Failing to address these risks may lead to negligence claims. Thus, when considering fossil-fuel projects, boards must evaluate climate impacts seriously.
Looking Ahead
The evolving legal landscape is shaping how companies approach environmental assessments. Future guidelines will aim to clarify how climate risk assessments should be integrated into the EA process. A differentiated approach may emerge: simpler screenings for early exploration and more complex assessments for production stages.
In summary, as South African courts emphasize the importance of climate considerations in environmental decisions, companies must adapt to remain compliant and responsible. With new guidelines on the horizon, the focus will increasingly be on sustainable development alongside economic interests.
