Climate-related lawsuits are increasingly used as a tool to hold private and public sector actors accountable for their contributions to climate change. According to the Grantham Institute 2023 Global Trends in Climate Change Litigation Policy Report (the “Report“) – published on June 29, 2023 – about two-thirds of climate-related cases have been filed since 2015: about 800 cases were filed between 1986 and 2014, but about 1,557 cases were filed between 2015 and May 2023.
While the majority of climate-related cases identified in the report were brought against regional and national governments, the report noted an increase in the number of climate-related cases against private sector actors. Of the 190 climate-related cases in the report filed between June 2022 and May 2023, approximately 46% were brought against an increasingly diverse group of private sector actors. This reflects the growing recognition by potential litigants of litigation as an effective means of influencing the actions that private sector actors take to address climate change. In this blog post we discuss the trends identified in the report.
The trends identified in the report
The report groups claims filed against private sector actors between June 2022 and May 2023 into the following main categories:
- Loss and damage;
The report notes that ‘loss and damages’ cases are becoming increasingly common in polluter-pays cases, with ‘carbon majors’ being sued on the grounds that the greenhouse gas emissions associated with their products have contributed to climate change and associated extreme weather conditions. , which have caused further losses for several communities. To date, around 60 of these cases have been brought against ‘carbon majors’, mainly by non-governmental organisations. The damages sought by plaintiffs in these cases have varied: some have sought financial damages based on companies’ historical responsibility, while others have sought to bring companies’ activities into line with international standards, such as the Paris Agreement (for more information about ‘loss and damage’). claims, read our previous blog post here).
However, the ‘loss and damage cases’ have by no means focused exclusively on the ‘carbon majors’. Several cases have been filed against car manufacturers with the aim of banning the production and sale of internal combustion engine vehicles, while other cases have been filed against financial institutions in connection with their due diligence obligations.
- Investment strategies;
The report highlights that recent cases have focused on what constitutes a reasonable investment strategy in the context of the transition to a low-carbon economy. These cases have mainly been brought by shareholders and trustees of companies.
Initially, such cases focused mainly on the financial consequences the company had already suffered as a result of mismanagement and failure to disclose climate risks. Some sought compensation for actual losses, while others sought confirmation from the company that aligning investments with environmental goals is not a breach of fiduciary duties. Recently, cases have focused on predicting future impacts, with shareholders and trustees arguing that continued investment in fossil fuel projects, for example, will lead to long-term losses.
- Climate washing; And
“Climate-washing” lawsuits – which the report defines as cases in which companies, and sometimes governments, are challenged over disinformation or misleading claims related to climate change – have risen sharply in the past two years: since 2015, there have been 81 climate-washing lawsuits cases against companies have been filed around the world, with 53 filed in 2021 and 2022. Such a rise is due to environmental groups’ growing frustration with corporate claims of contributing to tackling climate change, as well as the increasing number of regulatory initiatives aimed at tackling ‘greenwashing’. Such initiatives provide opportunities for environmental groups to challenge the claims of companies and financial institutions (for more information on greenwashing cases – which is broader than climate washing, as it relates to misinformation or misleading claims related to environmental issues – read our previous update here).
- Combined strategies addressing the full life cycle of high-emitting activities.
Lawsuits also continue to be filed against new developments in fossil fuels. Plaintiffs target multiple stages of the value chain of such developments, from project development to financing. The report notes similar trends in cases addressing deforestation, with litigants targeting the financing and communications of agricultural companies that contribute to deforestation. Recent legal developments aimed at tackling deforestation may increase the options for potential litigants (for more information on these developments, read our previous update here).
These categories show that litigants are becoming more innovative and sophisticated in applying climate litigation strategies. Litigants combine requests for damages, including compensation for past and present losses, contributions to expected future costs, and requests for courts to order companies to bring their activities into compliance with the Paris Agreement. Given the increase in both international and domestic legislative and regulatory activity aimed at combating climate change, the increasing availability of litigation funding, and the altruistic motivations of many litigants, it is likely that litigants will continue to explore innovative and advanced climate litigation strategies (e.g. For more details on the reasons behind the increase in climate litigation, read our previous blog posts regarding the 2021 and 2022 Grantham Institute reports here and here).
The report predicts that there will be an increasing number of lawsuits against private sector actors in the coming years, focusing on the following issues:
- The link between biodiversity and climate;
The number of lawsuits seeking deforestation-free supply chains is likely to increase due to a number of developments in legislation requiring companies to conduct due diligence across their entire operations and value chains (see for example our previous blog posts on the EU Corporate Sustainability Due Diligence Directive here and the EU Deforestation Regulation here), as well as improved remote sensing and financial data. The report shows that litigants are likely to argue that more ambitious measures are needed to restore forests and increase their carbon absorption capacity.
- The obligations of companies to protect the ocean;
The report suggests that future cases could include questions about companies’ duties to protect the ocean from further impacts of climate change, as well as exploring the topics of ocean acidification and ocean-based carbon dioxide removal techniques.
- Extreme weather conditions; And
The report notes that as extreme weather events become more frequent and severe due to climate change, there is likely to be a corresponding increase in the number of claims arising as a result of such events. While these cases may not directly address climate change, they can have a significant impact on how the impacts of climate-related disasters are understood.
- Climate pollutants with a short lifespan.
The report suggests that lawsuits could be filed against companies involved in the trade of products that emit short-lived climate pollutants such as black carbon soot and tropospheric ozone. Such cases may be based on existing torts (e.g. public nuisance) or human rights laws, regulations relating to pollution and environmental protection, and/or environmental legislation that aims to hold polluters responsible for the damage caused to the climate.
However, the risk of climate-related litigation is by no means limited to these issues, and therefore all private sector actors should be aware of the increased risk of litigation illustrated by the report.