GAIL Annual Summit 2024

Summary: Rewriting the Rules – Pathways to Legal Systems Change

Indy Johar is the co-founder of RIBA award winning architecture and urban practice Architecture00 and of Dark Matter Labs, a global organisation working on what is needed to manifest transformations to our food, housing, land, material and nature systems towards a future of mutual thriving. In doing this, Dark Matter Labs analyses the shifts it requires in the underlying ‘dark matter’ – monetary, economic, governance, regulatory and policy systems – to make this possible, and works with partners to demonstrate these alternatives in neighbourhoods, cities and bioregions. They share these insights openly for mutual learning.

In his keynote speech at the GAIL Annual Summit, Johar underscored the magnitude of the transition required to address climate change effectively. Drawing on analogies and practical examples, and drawing on Katharina Pistor’s work, he reframed lawyers as ‘coders of capital’ and highlighted that most of what lawyers are coding “is self-terminating us”. Within this framework, Johar underscored the urgent need for legal professionals to re-evaluate their approach to coding capital and shaping legal frameworks in light of the climate breakdown we’re facing.

Analogy of Capital Allocation in Foundations

Johar began by recounting an experience with a major UK foundation seeking to re-evaluate its endowment. Despite efforts to focus on environmentally and socially responsible investments, the foundation realised that its capital allocation was still contributing to self-terminating practices through a focus on doing less harm. It was all ESG compliant, but it was just less harm and in the scheme of things, it was on a pathway to self-termination.

The Misalignment Between the Scale of the Transition and the Scope of Action

Highlighting the significant discrepancy between societal aspirations and scientific realities, Johar challenged prevailing assumptions about the scalability of current “sustainable practices”. For instance, while there is a push for eco-friendly construction methods such as timber buildings, the availability of resources to support such initiatives remains limited. This underscores the need for a nuanced understanding of the environmental impact of different capital allocation decisions. By contextualising carbon reduction targets within the broader framework of climate breakdown, Johar underscored the urgency of adopting better informed approaches within the context of the climate breakdown we’re facing.

Crucially, Johar emphasised that when we look at the scale of the transition that we’re facing, we start to realise is the scope of what we’re doing is nowhere near commensurate to the problem. For example the UK uses up its1.5-degree budget by the middle of next year; the Netherlands is doing it June/July this year; and Denmark has already used up their budget. The budget’s already gone for 1.5°. This exemplifies the massive gap between what the science is telling us, and the capital that lawyers are coding and constructing.

Climate Terminology and Risks

Johar addressed the importance of language in framing climate-related risks, reminding lawyers as the ‘masters of language’ that linguistic precision is important in this context. Reframing climate change as climate breakdown, Johar highlighted the implications of climate breakdown for insurability and capital markets – including the loss of predictability and consequently, the loss of insurability – from Australia to California to Nova Scotia.

The Plausibility Gap in Policy and Science

Johar addressed the significant and widening gap between policy landscape, the perceived solutions landscape, and the actual science. He noted that various coders of capital are starting to understand risk in a fundamentally different way to many other actors – including intergenerational wealth-holders, central banks, security services, and communities on the ground, who are all seeing those risks emerge. This is making it increasingly clear that there is a foundational gap in how we’re coding the world around us and the world we’re constructing. Emphasising that lawyers are coding the capital allocations of the 21st century within the context of these massive gaps, he posed the critical question for impact lawyers as leaders in the profession – what does impact really look like in terms of what you’re coding, as against the science?

Johar noted that climate change is merely a symptom of the problem – it is not the problem itself. The larger problem is one of how we relate to the world around us. We’re optimising for extraction, the externalisation of costs, the generation of externalities (microplastics, CO2, etc), and the optimisation of value at single points (rather than the system as a whole). He emphasised that this is much more profound than just a problem of CO2 – it is about a more fundamental relationship about how we relate to the world around us. He urged that is the framework that lawyers have to engage with, in order to deal with the transition we’re facing.

Redefining Legal Horizons

Within this context, Johar emphasised the need to develop different structural and legal models, including models for care-based economies and community asset-management practices. There are critical legal question around how we build multi-capital infrastructures that operate across multiple economies.

For example, there is a need to build institutions that allow us to share liabilities. This requires a framework for multi-capital and multi-beneficiary infrastructures, along with many-to-many contracting. Dark Matter Labs is currently working with lawyers on many-to-many contracting agreements, where there may be hundreds or thousand people who are parties to a contract, rather than a bilateral contract. There are related legal questions, for instance, how do you construct an agreement not just based on monetary exchange but other types of care?

As another example, Dark Matter Labs is working with indigenous lawyers in Canada to redefine relationships with land. Moving from resource and asset-based world views to ‘agent-based’ worldviews that allow the land, or rivers, to become agents, have rights, or become self-sovereign. This form of re-coding opens up new horizons in legal conversations. Noting that law codes the world around us, Johar prompted lawyers to think philosophically about the world around us and their roles in creating these new structures and economies.

The Role of Legal Professionals

Central to Johar’s message was the critical role for lawyers in the context of a world in climate breakdown. As legal professionals tasked with shaping legal and regulatory frameworks, there is an urgent need for lawyers to bridge the gap between the solutions landscape and the actual science, and ensure that legislative measures are grounded in scientific evidence. Johar noted that within this context, ESG is “next to rubbish” if none of our investments will allow us to survive, the critical question becomes – does this stop us self-terminating? This requires a paradigm shift in legal thinking towards a more holistic understanding of value creation and preservation.

Lawyers must create the landscape of the ‘next justice’. The law is sometimes not sufficient for justice. The scale of the challenge ahead demands nothing less than a radical reimagining of legal practice.