When employees speak out on climate change

The recent decision by HSBC to suspend one of its senior executives has called into question how far employers can regulate the climate-related views of their employees in the workplace.

Stuart Kirk, global head of responsible investment for HSBC’s asset management division, was suspended after he claimed that bankers and policymakers had been overstating the financial risks of climate change. Mr Kirk’s comments on climate change — which drew anger from environmentalists — included that his career had frequently featured “some nut job telling me about the end of the world”, and that the climate debate had become an attempt to “out-hyperbole the next guy”.

Businesses are now guarding their climate-conscious credentials more closely than ever. For some, this includes adopting policies governing what their employees can and cannot say about environmental issues in a work context. This approach engages a number of significant legal protections which employers should be aware of.

Discrimination

The Equality Act 2010 (EA 2010) prohibits discrimination because of religious or philosophical beliefs. Belief in man-made climate change is covered; this was confirmed by Grainger v Nicholson 2010 IRLR 4, a case involving a Mr Nicholson, who was employed as head of sustainability until he was made redundant. He expressed his belief as one "that mankind is heading towards catastrophic climate change and therefore we are under a moral duty to lead our lives in a manner which mitigates or avoids this catastrophe for the benefit of future generations, and to persuade others to do the same".

Interestingly, the EA 2010 also prohibits discrimination because of a lack of a protected belief. This means that climate change deniers are also protected from discrimination based on their lack of a belief in man-made climate change.

In Mr Kirk’s case, it seems he did not deny climate change as such; he in fact stated that climate risk is too far in the future to be significant for many investors. Our view is that this is more likely to be classified as an opinion based on the current state of information than a “belief”, which may leave it outside the protection of the EA 2010. But the same cannot be said of many other types of climate-related beliefs held by employees.

Whistleblowing

The Employment Rights Act 1996 (ERA 1996) provides protection for whistleblowers – those who make “protected disclosures”. These include disclosures “that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject” (section 43B(1)(b)). This could catch a number of legal obligations related to the environment, including for example directors’ duties under section 172 of the Companies Act 2006 to ‘have regard’ to ‘the impact of the company’s operations on the community and environment’ and ‘the likely consequences of any decision in the long term’.

Importantly, a protected disclosure may also be “that the environment has been, is being or is likely to be damaged” (section 43B(1)(e)). This is a specific category of protected disclosure on the face of the legislation. The scope of this provision is very broad; it does not require any definable legal breach by the employer, nor any particular level of damage to be inflicted on the environment. It is also irrelevant where the environmental damage takes place.

This environmental damage provision was tested most recently in Mr M Carr v Bloomberg L.P.: 2205003/2020 Mr Carr, the former European carbon and gas correspondent for Bloomberg’s London bureau, claimed that he was dismissed in retaliation for making protected disclosures over the way Bloomberg was covering the climate crisis.  Mr Carr claimed that Bloomberg was influenced by its significant number of clients in the fossil fuel industry, and as a result “tended to publish stories more sympathetic to fossil fuel interests and less sympathetic to climate change”. Mr Carr believed that Bloomberg “was indirectly contributing to fossil fuel emissions in the way it covers climate-related news”.

The case came before an employment tribunal in April 2021 for a preliminary hearing. The tribunal struck out many of Mr Carr’s alleged disclosures on the basis that they were expressions of his opinion rather than disclosures of information, but did allow that a number of his disclosures could potentially satisfy section 43B(1)(e). However, the claim was ultimately dismissed, primarily on the basis of strong evidence that Mr Carr’s performance was poor and had been for many years, which made it more likely that the reason for Mr Carr’s dismissal was his lack of capability, rather than his whistleblowing.

Is a protected belief or disclosure enough?

The Carr case shows that having a protected disclosure (or belief) relating to climate change is only half the story. To have an actionable claim, the individual must show that there is a causal link between that disclosure or belief, and some disadvantage they have suffered (such as dismissal). The causation tests under EA 2010 and ERA 1996 have their own nuances. However, in both cases, if an employer can show that its reason for treating the worker detrimentally was not the protected belief or disclosure, but the manner or way in which it was expressed, then the employer may escape liability. This was demonstrated very recently in Kong v Gulf International Bank (UK) Ltd [2022] EWCA Civ 941, where an auditor was dismissed for her conduct in making a protected disclosure to the bank’s head of legal, and for questioning the latter’s integrity and awareness. The Court of Appeal, in a decision handed down on 8 July 2022, found that this was properly separable from the disclosure itself.

Where does this leave us?

As the law currently stands, both climate change activists and deniers may have protection from discrimination based on climate change-related views under the EA 2010. There is also plenty of scope for whistle-blower protections in relation to environmental disclosures under ERA 1996. Although there has so far been only a handful of cases in this area, we expect to see more employees asserting these protections, and for employers to face more disputes and potential litigation, as time goes on. There is significant potential for reputational damage for getting this wrong, not to mention legal and financial exposure, since both whistleblowing and discrimination claims attract unlimited financial compensation.

All of which means that the employee voice on climate issues needs to move up the risk agenda for employers. Businesses need to have – and enforce – consistent policies on what views can be expressed in a work context. Management and employees alike need to be aware that a range of views are protected, and employees may therefore come into conflict, both as between themselves, and with the employer’s ‘party line’. Clarity and consistency in the employer’s policy is essential; in Mr Kirk’s case, both the title of his presentation (“Why investors need not worry about climate risk”) and its content was allegedly agreed in advance by senior management. This made reports of his subsequent suspension all the more difficult for HSBC. If the business and its workforce cannot always speak with one voice on climate issues, the legal protections attaching to different views must be understood and respected.