By Luke Gibbons

It is unquestionable that commercial entities, would not function without energy supply. Further, as Bridge outlines, “there is no doubt that energy…[can be] bought and sold”. (Benjamin’s Sale of Goods,9^th.edn.2014). Thus, the fact the judiciary and legislator have failed to clarify whether such constitute “goods” under the Sale of Goods and Supply of Services Act 1980, and therefore, accrue heightened remedial availability than “services”, while providing no definition of “services”, and as White states, no principled reason why this protectionism to goods exists, is abhorrent.(White,Commercial Law,2^nd.edn.2012).

It is regrettable that a definition requiring tangibility, from a period when energy was not paramount is stifling jurisprudential and legislative development, as “there are …difficulties attributing to energy … legal qualities of… physical objects”.(n1) Consequently, a multijurisdictional solution has developed, distinguishing “bottled” from “flowing” energy, as held in Bradshaw v Bothe’s Marine[1973]35.DLR.(3d)43, with the former being deemed “goods”. Although unfavourable in an already uncertainty area, it is submitted, such may be necessary. This is contended as Part IV of the 1980 Act only implies “terms” akin to “conditions” implied to sale contracts, if a contract is held to be for supply of services, and following Carroll v An Post National Lottery[1996]1I.R 433, a narrow view of  such is proffered. Thus, one contends, if this distinction was not held, there would arguably be no protection for commercial entities who buy “bottled” energy, as such may not be deemed a service, and also, not be subject to the proposed Consumer Rights Bill 2015.

Further, it is argued, the definition’s impact is exacerbated, as energy is considered a “good” in many Statutes such as, the Consumer Protection Act 2007. In spite of such, one must question, to remedy this arbitrary distinction, is it feasible for energy in general to be deemed a “good” under the 1980 Act, now that “services” are offered protections?

It is arguable, the dearth of cases may warrant maintaining the status quo. Furthermore, it is contended, if energy constituted a “good”, s.35 may be invoked, deeming acceptance by “use”, being an act inconsistent with the seller’s ownership. However, it is noted, as such is expressly subject to s.34(1) allowing for reasonable inspection, and as such allows operation, subsequent to Benstein v Pamson Motors Ltd[1987]2.All.ER.220, the “use” of energy uncovering a “latent defect” for instance, may give rise to more favourable remedies to “buyers”.

Nevertheless, a determination that energy is a “good” may arguably detrimentally effect remedial availability. Currently, in energy being a “service”, implied terms are “innominate terms”, warranting damages or termination depending on the breach’s seriousness, as denoted from Hongkong Fir Shipping v Kaawasaki Kisen Ltd[1962]2Q.B..26. However, it is contended, if deemed a “good”, claims would likely be made under s.11(3) of the 1893 Act, arguing; if some energy was consumed prior to rejection, a partial rejection occurred, and thus, implied conditions would be converted into warranties, with damages being the only remedy. Further, although White requests allowance of partial rejection as in the UK, it is argued, such would not assist as energy would likely be subject to the “commercial unit” exception. Thus, the only solution to this quandary may be “freedom of contract” in allowing such, although as monopolised energy suppliers are often the dominant party, this seems unlikely.

Furthermore, retention of title clauses are hallmarks of sales contracts, as such provide remedies for sellers, when “goods” are sold on credit. Although, White contends such are common where “goods” are consumed before credit periods end, the recent case of PST Energy v OW Bunker Ltd[2016]UKSC23 held, in relation to fuel, one cannot obtain title to something that no longer exists, so it cannot be a transaction with such at its heart. Thus, it is argued, in undermining a key remedy when buyers become insolvent, and a foundation of credit arrangements, this holding encapsulates why deeming energy as “goods” is unworkable.

It is submitted, due to the difficulties outlined, the Sales Law Review Group’s recommendation to hold implied terms for services as “conditions” in legislation should be adopted. Although, it is noted, this may not fully remedy the remedial deficit offered to “services”, such would allow commercial users of differing energy forms, seek relatively equal remedies bringing some homogeneity to the law.

By Abigail Fernandes

On September 20th and 27th , millions of people took to the streets to strike for climate action. This mass protest was a way of expressing a public sentiment that “Business as usual is no longer an option”. However, Charities and Governments around the world do not have enough capital to meet the challenges faced by the environment. Where then can we find enough capital to help the government tackle this issue? One of the best solutions to this ever-existing crisis is “Impact Investing’. The term was coined more than a decade ago but begun to gain momentum only since the last year. It refers to an agreement entered into by entrepreneurs, companies, organisations and philanthropists to invest in markets that create a social or environmental impact and generate returns. This in turn creates a win-win situation for the environment and the investors at large.

Why Impact Investing Now?

The benefits of Impact Investing are manifold. The future of human beings and the environment are interdependent. The temperatures of our planet are rising, and the icebergs are melting and the on area that is bound to get impacted is our ‘Big Businesses’. As rational beings we need to have a strong compulsion to protect our dying planet that has so much to offer. Impact Investing ensures that businesses are held accountable for the activities undertaken. Institutional Investors can see to it that the companies that they invest in are minimising risks and maximising opportunities that are presented by climate change. Thus, enabling a cleaner and greener environment. Investing in sectors like solar energy and wind power can put an end to the use of fossil fuels and help companies find new efficient ways of meeting the energy needs of the society. A greener future can be good not only for the planet that we live in but also to our wallets. A 2018 study by GIIN found that more than 90% of impact investors reported that their investments were meeting or surpassing their projections.

Growth Avenues for Impact Investing

With the growth of Impact Investments rapidly increasing, some of the best options for impact investing are iShares Global Clean Energy ETF, First Trust ISE Global Wind Energy Index Fund, Gree Mutual Funds like Amundi, Calvert Green Bond Fund, Brown Advisory Sustainable Growth Fund. These investments have a proven track record of positive returns while being beneficial to the society. The growth in these avenues is only going to increase as people now have the option of investing in hedge funds, private foundations, banks, pension funds, and other fund managers. Another way of investing is by adding a Donor Advised Fund (DAF) to one’s impact strategy. An investor gets a multiplier effect on his investments while investing in a DAF. The Fund invests only in companies that create a social impact and then those investments give back up to two to five percent returns to the DAF.

The US municipal finance sector is need of environmental impact bonds as climate change has become very important to protect their community from the bad effects of climate changes. Environmental impact bonds offer a solution to this problem. These securities are municipal bonds that transfer a portion of the risk involved with implementing climate adaptation or mitigation projects from the public agency on to the bondholder.

A good example for this is quoted from an article in The Harvard Business Review regarding a $25 million bond issued by the municipal water board in Washington, D.C. in 2016.The water board used the bond to fund the construction of green infrastructure to manage stormwater runoff and improve water quality. The return to investors is linked to the performance of the funded infrastructure, which allows DC Water to hedge a portion of the risk associated with both constructing green infrastructure and, once it’s in place, how well it works. Investors receive a standard 3.43 percent semi-annual coupon payment throughout the term of the tax-exempt bond. Towards the end of a five-year term – at the mandatory tender date – the reduction in stormwater runoff resulting from the green infrastructure is used to calculate and assign an additional payment If the results are strong (defined in three tiers; tier 1 being best performance) the investors receive an additional payment ($3.3 million) – bringing their interest rate effectively to 5.8 percent. If the results are as expected, there is no additional payment. And if the infrastructure underperforms, the investors owe a payment to DC Water ($3.3 million) – bringing the interest rate to 0.8 percent.

The Verdict

Impact Investing is and will be the future. However, investors should choose not to invest in companies that have a negative impact on the environment. The more investors give importance to impact investing, the better companies with a mission of environmental sustainability will perform. Hopefully this should encourage more and more environmental conscious investors to grow their investments and improve the world in one motion. Thus, rewarding businesses for their commitment to a higher calling.

By Jan Keim

Artificial Intelligence (AI) and its subsets, such as Machine Learning (ML), are among the most heavily discussed technologies, both in academia and in business. AI is predicted to fundamentally disrupt many areas of business, from cybersecurity to supply chain management. In fact, most people interact with some sort of AI on a regular basis, for example when using a chatbot or filtering emails. A 2018 study conducted by PricewaterhouseCoopers (PwC) estimates a worldwide Gross Domestic Product (GDP) growth by up to 14% by 2030 as a result of accelerated use of AI, with China growing its GDP by up to 26%, compared to Northern Europe with an expected growth of 9.9% and North America with 14.5%. The Organisation for Economic Cooperation and Development (OECD) forecasts a strong impact of AI, especially on manufacturing, with the potential creation of entirely new industries. The digitalisation of industry, commonly referred to as “Industry 4.0”, is a prime example of rapid change driven by AI. Technologies such as the Internet of Things (IoT), big data analytics, cloud computing, augmented reality (AR) and 3D printing underpin this process and may lead to the transformation of manufacturing into “a single cyber-physical system in which digital technology, internet and production are merged in one”, as the European Parliament Research Service puts it.

While AI certainly has tremendous potential to transform manufacturing, one industry that is less talked about in this context is agriculture, even though the agriculture industry is among the most relevant to populations’ daily lives. There are various applications of AI in agriculture already. However, most of these applications are limited to bigger farms, currently neglecting smallholder farmers. Three areas of application of AI in agriculture are outlined below:

Precision Agriculture

Precision agriculture refers to the observation, measurement and responses to variability in crops, fields and animals. By using AI to increase crop yields and animal performance, precision agriculture can reduce costs and optimise processes. For example, Blue River Technology, a U.S. based start-up that has been acquired by tractor giant John Deere in 2017, uses computer vision and AI to precisely apply herbicides, instead of spraying entire fields. This approach not only saves money, it also decreases the environmental impact of plant protection products by eliminating up to 90% of the herbicide volumes.

Field Monitoring & Harvest Forecasting

Analysing the current condition of fields has long been a labour-intensive challenge for farmers. By analysing drone and satellite pictures using AI, farmers are now able to receive accurate data on their fields’ condition, vegetation issues and problem areas. For instance, IBM’s Watson Decision Platform for Agriculture provides farmers with tools that alert them should there be threats from weather forecasts, soil conditions, evapotranspiration rates, or crop stress. This helps farmers improve crop protection and optimise crop yields, for example. Ultimately, field monitoring helps farmers estimate their agricultural yield and plan security measures accordingly.

Process Automation

The United Nations (UN) predicts that by 2050, 68% of the world’s population will live in urban areas. This will lead to a decrease in labour force in rural areas. By automating processes, easier risk identification, faster decision making and remote operations, AI can significantly reduce the need for labour in the agriculture industry and decrease labour costs.

While there are many benefits to using AI in agriculture, there are a few challenges that have to be taken into consideration while moving towards a more automated and AI-enhanced future. Firstly, many applications of AI, or digitalisation more generally, can be cost intensive, require technological knowledge and demand special infrastructure. While big farms can largely benefit from AI applications, smallholder farmers may be left behind. Hence, ensuring that smallholder farmers equally benefit from the technological progress is a crucial task for politics and science alike. Secondly, the AI-supported automation of agricultural processes tends to benefit countries with large farmlands, such as the United States, Germany or France. Yet, many smaller countries are dependent on agriculture, such as Togo, Sierra Leone or Guinea-Bissau. So far, trade barriers have helped some smaller countries to protect their agricultural sector. However, the advancing globalisation and increasing international trade may exacerbate such policy, which could endanger smaller countries’ agriculture. Thirdly, the technological development in agriculture tends to benefit developed countries. High wages in developed countries create a strong incentive to automate processes and thereby save labour costs. In developing countries with lower wages, this incentive is weaker. According to a discussion paper by McKinsey & Company, the automation could bring back production from poorer countries to developed countries, which would likely increase the lead of developed countries over developing countries.

AI can help farmers tackle some of the most pressing problems they face today. Therefore, the steady adoption of AI will most likely continue and ultimately become mainstream. However, to ensure a level playing field, policymakers, scientists and innovators need to make sure that neither smallholder farmers nor entire developing countries are left behind.