Travel companies have been urged to carry out due diligence on their supply chains following a “massive ramping up” of environmental laws alongside a risk of “very costly” litigation.
Aidan Thomson, partner at law firm Weightmans, said the steep rise in the number of laws posed significant challenges for some companies as well as “big opportunities” for others.
Smaller companies that are not required to comply with reporting requirements will still be affected by the changes, he said, because the larger organisations will ask them questions linked to their position in supply chains.
“Do due diligence on your suppliers,” he urged travel companies, adding: “Make sure you only do business with people who are not going to be an environmental, social and governance (ESG) risk to you.”
During a presentation at Abta’s Travel Regulations conference in London, he said there was currently a “frenzy of activity” on ESG across all industries.
“Detailed environmental reporting has been in the UK for just a short while and it’s just starting to get cracking now,” he said. “It’s all been very turbocharged in recent times.”
Failing to carry out strong ESG reporting could lead to professional embarrassment, he warned, or the prospect of complaints or legal action.
Outlining the potential for litigation linked to supply chains and international operations, he pointed to a number of cases that have already appeared in court.
British companies should take care if they have international operations in locations including Africa and South America, he said, as there is a risk that residents in the destinations could take legal action claiming environmental and social damage.
“Miss something important in your international operations and these sorts of cases may be in store,” he said, cautioning that such cases are “very costly and very time-consuming to defend”.
“These sorts of claims are best avoided if possible,” he added.
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