Our key takeaway: Companies, take note: climate change-related litigation is on the rise in courtrooms across the globe, and plaintiffs are using novel approaches to hold companies to account for their contributions to global warming. There are currently over 2,300 climate cases in courts globally, more than two-thirds of which have been filed since 2015—and authors in a new compendium covering trends on climate litigation expect this trend to continue. A few highlights: Companies are facing litigation using diverse legal approaches, some of which are being newly applied to the climate context. For example, “polluter pays” lawsuits are holding companies to account for their GHG emissions and, increasingly, using the targets set by the Paris Agreement as a benchmark for expected practice. Other lawsuits are targeting companies for failing to adapt to physical or transition risk brought about by climate change, or for “climate-washing” their transition efforts. Another trend is the application of human rights frameworks to climate cases to provide an avenue for remedies that don’t currently exist within environmental and climate change law. This is coupled with a projected rise in cases that hold companies and their leadership accountable for conducting human rights due diligence—especially as what was once soft law is now hardening into legislation in the EU and beyond. Likewise, companies can expect to see an increase in just transition litigation that requires a demonstrated commitment to a net zero transition that ensures respect for human rights along the way. Overall, the trends highlighted cement the importance for companies of conducting robust human rights and environmental due diligence across their full value chains and applying the principles of a just transition to their net-zero initiatives.
The Oxford University Bonavero Institute of Human Rights has released Climate Litigation in Europe Unleashed: Catalysing Action Against States and Corporations, edited by Ekaterina Aristova and Justin Lim (March 2024). The report is a compendium of 16 articles; we highlight key takeaways from a selection of articles:
- Four emerging categories of climate litigation against companies: Dr. Joana Setzer and Dr. Noah Walker-Crawford highlight the direction of travel for climate-related lawsuits against companies, pinpointing four distinct legal approaches. (1) “Polluter pays” lawsuits are being used to hold oil and gas companies to account for their contributions to global warming. There are now “more than 20 cases filed against oil majors in the US, many of which raise arguments and provide evidence of the defendants’ causal contributions to climate change.” (2) Lawsuits are being brought against companies who emit greenhouse gas emissions above the benchmarks set by the Paris Agreement. For example, Milieudefensie et al. v Royal Dutch Shell plc. emphasised the company’s duty of care to plaintiffs to reduce emissions: “Bringing a ‘forward-looking’ case focused on major emitters’ activities and investment decisions from the present day and into the coming decades, cases like this seek a declaration from courts that fossil fuel companies’ climate change targets should be aligned with those of the Paris Agreement.” (3) “Failure to adapt” cases can include lawsuits that take aim at a failure to adapt physical infrastructure to climate risks (e.g., lawsuits against utility company PG&E “alleging mismanagement by both the executives and the board for failing to prevent power lines from exacerbating the risks of wildfires.”). These types of cases also include those where companies—and their boards and leadership—have allegedly failed to adapt existing business models to account for transition risks like stranded assets. (4) “Climate-washing” claims “cover various types of misinformation, including challenges to corporate climate commitments, claims about product attributes, overstated investments or support for climate action, and failure to disclose climate risks.” The authors highlight the increased diversity of types of climate-related lawsuits against companies. While early lawsuits were targeted at fossil fuel companies directly, the authors have observed a trend between 2015 and 2022 towards filing cases in new jurisdictions, in new sectors and against different types of organisations including companies, financial institutions and trade associations. This is in part due to a rise in climate-washing cases during this period, but “may also be attributable to the increasing sophistication of litigation strategies and the identification of new pressure points within corporate value chains, particularly regarding the provision of finance for high-emitting activities.”
- The role of human rights in climate litigation: Professor Annalisa Savaresi explores the application of human rights law to climate change litigation: “The rights-based climate cases, ranging from lawsuits initiated by children to broader inquiries into the impacts of activities such as oil and gas licenses, share a common thread: they draw upon established jurisprudence concerning human rights and the environment, compelling courts to apply human rights jurisprudence to climate-related issues for the first time.” One reason for this is that human rights-based claims can provide an avenue for remedies that are “unavailable” within environmental and climate change law. Key examples in Europe include judgments in the Netherlands, Germany and Belgium that “have relied on the established human rights jurisprudence, demonstrating that courts are comfortable framing climate harms as human rights issues." At the same time, Savaresi argues that leveraging human rights law should not be a permanent solution—we also need enforceable climate legislation that can bring companies to account: “In other words, we need better laws and better enforcement.” In a separate article, Dr. David Birchall suggests that the future of binding legislation on climate change will be informed by current soft law on corporate accountability, especially around the corporate responsibility to conduct human rights due diligence (HRDD). For example, “[w]hile responsibilities towards climate change are not specifically mentioned in the UNGPs, insofar as climate change causes adverse human rights impacts, corporate responsibility toward climate change is part of the corporate responsibility to respect human rights.” He anticipates that the "next evolution in the soft law-hard law dyad will be towards broader and firmer HRDD standards, with more states enacting legislation, clearer standards for what companies must do under such laws, and clarification of the climate due diligence under such laws.” Future trends for the private sector to watch include a “renewed focus” on the responsibilities of financial actors on human rights and environmental rights; directors’ duties in relation to HRDD obligations and “more broadly, to protecting people and the planet”; and the potential for cases requesting climate reparations and funding for climate remedies.
- Just transition litigation: Authors Michael Clements and Elodie Aba point out the double-edged sword of the transition to a net-zero economy, where efforts to move towards renewable energy can have unintended negative consequences on human rights and the environment. Communities impacted by transition minerals extraction and renewable energy projects “are increasingly turning to courts to vindicate their rights so that the transition is not only just but fair.” Citing research by Annalisa Savaresi and Joanna Setzer, the authors point to “just transition litigation” not as a way to stop the energy transition but rather as a legal approach that ensures that the energy transition does not come at the expense of human rights, especially those of Indigenous Peoples, workers and other affected communities. Just transition litigation has been increasing in recent years, with some domestic courts “demonstrating early receptiveness to the arguments and claims of affected communities, with the majority of cases ending in victory for these communities.” Many of these cases have been taken up by courts in Latin America, although there are also some cases in Africa, Europe, Southeast Asia, and the U.S. Companies should take heed of this pattern: “the rise of just transition litigation should be viewed as an important warning for companies and investors that there is a legal – and associated reputational and financial – risk if they do not ensure a human-rights-centred approach to these projects from the start and throughout the project cycle.” Three core principles underpin a just transition: “shared prosperity between stakeholders, including communities and workers; a corporate duty of care that centres respect for human rights to shield workers and communities from harm; and fair negotiations, including community consultation throughout the project lifecycle and robust implementation of the principles of free, prior, and informed consent for Indigenous communities.”
