A fascinating development in Germany saw Germany's Climate Protection Act, introduced to oblige the country to meet 2030 targets for cuts in greenhouse emissions, declared unconstitutional. In a historic ruling, the German constitutional court ruled that the Act did not go far enough, pushing the date by which climate targets must be met too far into the future, and therefore placing an inequitable burden on future generations. The German Government has responded by imposing more ambitious targets.

The case should be of great interest to all those involved in ESG, impact investing and philanthropy. It demonstrates the importance of, and power of, the law, which will play a fundamental role as the world looks to address the climate crisis in the coming decades.

For trusts practitioners, the importance of legal issues is borne out by concerns around fiduciary risk. Trustees of both pension funds and private trusts continue to be hampered in fully embracing 'social' or 'responsible' investment by fiduciary risk, and whereas progress is being made on the institutional pension-fund side (albeit not uniformly - see my recent blog on developments in the US here), private trusts law in the main offshore trusts centres is yet to seriously address the issue. 

Resolution of this would play a huge part in unlocking significant sums of capital for these asset classes. The law, whether in the Court room (as demonstrated in Germany), or in parliaments (i.e. by legislative reform to address specific concerns), can play a huge part.