Companies at greater risk of climate change litigation as lawyers think creatively to hold them accountable, say experts
"Climate litigation is coming for the private sector", 13 Apr 2021
Climate litigation has ebbed and flowed since the first cases in the 1980s, but as the quality of both scientific data and non-financial reporting improves, and governments and companies set increasingly ambitious climate-related targets, so do the avenues for lawsuits...
...[C]orporate lawyers are increasingly warning their clients of the risks...
Nigel Brook, head of re-insurance at law firm Clyde & Co, says the past three years have been “transformational”.
“As well as more cases generally, we’re also seeing new species of cases: human rights-based claims are coming to the fore, and there’s a lot of new thinking going into cases against corporates,” he says. “Every win creates a new precedent, which then leads to more cases.”
Claims generally fall into two categories, which means the risk to companies can be both direct and indirect: it could be specifically singled out by activists or could face transition risks if a case against a government results in policy change...
...[A] small but growing number of cases are using existing corporate laws in creative ways on climate – and each win sets a new legal precedent, opening the door for more cases.
Maurice MacSweeney is a director at London-based Harbour Litigation Funding, which manages $1.5bn of private investors’ money, investing specifically in commercial disputes. He says the firm is looking at an increasing number of climate-related claims and is particularly interested in suits seeking damages from corporate defendants...
Environmental charity ClientEarth has had considerable success with novel corporate law approaches to environmental complaints.
The most successful shareholder-to-plaintiff case to date was its claim against Polish utility Enea to block the construction of a new €1.2bn coal plant...
Greenwashing concerns have been a constant feature of any conversation on sustainable finance and investment – and they will be an increasingly prominent feature of climate lawsuits, too...