Column: Horner On Climate Litigation & More
[Column written by Patrice Horner]
The Climate Investment Summit provided updates on a major topic facing Climate Solutions, and that is litigation. In a London School of Economics 2024 Snapshot Report, it appears litigation levels have stabilized but have not stopped. The Snapshot was presented at the London Climate Week by Joana Setzer Associate Professorial Research Fellow and Catherine Higham Policy Fellow [Climate Change Laws of the World]. Full details are available on the LSE Grantham Institute website.
There are some 2,000 active legal cases globally including 230 new cases in 2023. Brazil is leading the pack due to their unique position with the Amazon rainforest, both infringements and potential for green washing. There are new types of arguments from more diverse regions of the world. There are cases in Portugal, Hungary, and Panama. International cases represent 5% of the total. The International Treaty on the Law of the Sea agreed by UN countries last year hold countries responsible to protect the environment, including the Ocean. India confirmed a new right for the people to be ‘free of adverse climate impacts’. These are very broad issues and difficult to quantify or track.
Not all litigation is aligned with the climate goals. There were 50 non-aligned, such as Exxon against Arjuna Capital to block share-holder activism from misuse of shareholder data. The lawsuit was dismissed when Arjunda stopped activity. ‘ESG backlash’ cases raise the question of climate risk in financial decision-making. ‘Strategic litigation against public participation’ [SLAPP] suits work to deter NGOs and activists from pursuing climate agendas. ‘Just transition’ cases challenge impacts of climate policy on human rights grounds. In an odd turn of litigation, there are ‘green v. green’ cases, over the trade-offs between climate and biodiversity or other environmental aims.
There have been major cases involving governments. The EU Court of Human Rights upheld a convention requiring stringent protection for citizens. In the US, there were youth climate litigants in Montana. These types of cases are likely to continue. The laws of the Philippines will hold corporations responsible for global settlement. A landmark Urgenda decision found that the Dutch government violated a duty of care to its citizens as a result of inadequate action on climate change. The EU’s Corporate Sustainability Reporting Directive [CSRD] may lead to penalties with some claiming crimes against humanity. Disclosure Laws such as those proposed by the US Security and Exchange Commission [SEC] are crafted to protect investors.
More litigation is targeting corporations. ‘Climate washing’ cases saw huge growth with some 140 cases and a 70% success rate. ‘Polluter pays’ hold companies accountable for climate-related harm allegedly caused by their contributions to greenhouse gas emissions in some 30 cases. ‘Corporate framework’ cases look for companies to align group-level policies and governance processes with climate goals. A new category of ‘transition risk’ cases was introduced, including against corporate directors and officers for their management of climate risks, where shareholders of Enea planned a case against former directors for planned investments in a new coal power plant in Poland.
A cause or causation based on attribution of damages can be global. Take for example green-house-gases and the melting of the glaciers. Whereas issues around biodiversity are always local. There is an ownership structure in the community with banks and monies involved. Since it is easier to identify and quantify, the biodiversity cases are likely to be fast-tracked. A direct impact on cases can be with determined with quantitative methods. For indirect cases, there may be damages assessed versus fines imposed.
Cases surrounding climate lawsuits might follow the approach of Superfund Cases that were used against the Tobacco Industry, wherein an industry creates a fund for defense. An upcoming area of litigation will arise from the expanded reporting of what is known as Scope 3 emissions, which are those arising from activities of customers using companies’ products or services. Climates harm across borders and are likely to be reviewed on an attribution basis when assessing damages to the climate arising from greenhouse gas emissions. Some legal arguments may be outside of the scope of existing laws and jurisdictions.
- Patrice Horner, MBA, EFA
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Category: All, Environment
