Although most cases to date have been against governments, suits against companies associated with large emissions are multiplying
Save time by listening to our audio articles as you multitaskThe lawsuit ClientEarth filed against Enea’s directors a couple of months later alleged that, in pursuing the project, they were failing to act in shareholders’ best interests. Ostroleka C, the lawyers argued, was destined to become a stranded asset: one which, in the increasingly decarbonised world of European electricity generation, would be unable to operate profitably. It therefore presented an “indefensible” financial risk.
There are three reasons the trend is likely to continue. One is that as more countries put their Paris pledges, and the updates to them made in Glasgow last year, into law there are more opportunities for lawyers to pounce. A second is that success breeds success. According to the Grantham data, as of 2021 58% of cases outside America which had been concluded had outcomes favourable to the parties seeking more action on climate. Only 32% of results had been unfavourable.
In February 2020 a group of young Germans led by Luisa Neubauer, a climate activist, sued their government for failing to set climate targets that were in line with the Paris agreement goals. A year later the Federal Constitutional Court found in favour of the plaintiffs; it ruled that the government had a duty to protect future generations and that the nation’s emissions budget could not be consumed by one generation at the expense of the next.
Since Paris, though, several big fossil-fuel companies, including Chevron, ConocoPhillips and Shell, have been systematically including climate lawsuits as a potential material risk. Having made scant mention of such litigation previously, in 2016 Chevron listed “private” climate litigation as a “potential” risk. By 2020, the company was referring to a risk of “increased investigations and litigation” related to climate change.
In America, New Zealand and other jurisdictions some judges have agreed and dismissed cases on those grounds. Others have found in favour of the plaintiffs but declared that the fix was outside their remit and bounced the issue back to legislators. The Milieudefensie case, where the judges mandated quantitative emissions-reduction targets, is a notable exception.
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