Increasing number of climate change litigation cases outside US and against non-fossil-fuel firms
First cases reported in Italy and Denmark
Climate change litigation continues to grow in importance, with corporates being targeted as well as governments. While most cases are heard in the US, an increasing number of cases being brought outside the country. And the range of claimants and defendants continues to diversify, with food and agriculture, transport, plastics and finance all being targeted as well as the “carbon majors”.
This is according to a major report, Global trends in climate change litigation: 2022 snapshot, by the LSE’s Grantham Research Institute on Climate Change and the Environment, published in conjunction with the Centre for Climate Change Economics and Policy.
The aims of climate change litigation are varied, from enforcing or enhancing climate commitments made by governments, to advancing climate policies, creating public awareness, or changing the behaviour of government or industry, says the report. It adds that concerns over climate-washing and misinformation are growing, with more cases involving personal responsibility.
The report examines climate change litigation in the year to May 2022 and finds that climate change litigation continues to grow in importance year on year, as a way of either advancing or delaying effective action on climate change.
Globally, the cumulative number of climate change-related litigation cases has more than doubled since 2015. Just over 800 cases were filed between 1986 and 2014, and more than 1,200 cases have been filed in the last eight years. Nearly three quarters were filed before courts in the US but 2021 saw the highest annual number of recorded cases outside the US, with cases identified for the first time in Italy, Denmark and Papua New Guinea.
“While climate litigation has become an instrument used to enforce or enhance climate commitments made by governments, further cases have been brought against the carbon majors and other fossil fuel companies, especially outside the US, in the last 12 months. Cases against corporate actors are also increasingly targeting the food and agriculture, transport, plastics and finance sectors,” the report states.
Cases against the carbon majors and other companies involved in the extraction of fossil fuels or the provision of fossil energy have continued to proliferate, now more significantly outside of the US, says the report, and cases are also being filed against a more diverse range of corporate actors. It notes that in the calendar year 2021, while 16 of the 38 cases against corporate defendants were filed against fossil fuel companies, more than half were filed against defendants in other sectors, with food and agriculture, transport, plastics and finance all being targeted in multiple cases.
The report notes that several new and ongoing cases involving financial institutions seek to clarify the legal obligations of both public and private financial institutions for their “portfolio emissions” as a means to influence broader understanding of, and approaches to, climate-related financial risks within the global financial system.
“Recently filed complaints confirm a shift in emphasis from cases concerned primarily with the disclosure of climate-related information to cases focused on questions about what prudent financial management means in the context of the transition to a low-carbon economy,” it states. “It is worth noting that to date, cases against private financial institutions have primarily focused on institutional investors with long-term investment horizons, which are increasingly understood as having obligations to manage and mitigate environmental externalities from their investments, given the harm such externalities may cause to other areas of their portfolios.”
And it finds that climate-related greenwashing litigation or “climate-washing” litigation is gaining pace, with the aim of holding companies or states to account for various forms of climate misinformation before domestic courts and other bodies.
The report states: “We anticipate more litigation focusing on personal responsibility (ranging from criminal actions to cases focused on the duties of directors, officers and trustees to manage climate risks), but also international litigation addressing the prevention of and redress (or loss and damage) for climate change.”
There is a shift in the types of defendants being targeted in corporate climate cases. “Historically, discussion of climate litigation against companies has centred on cases against the carbon majors, the so called ‘holy grail’ of climate litigation. To date, the vast majority of these cases have been filed in the US, mainly by city and state governments,” the report says.
“In recent years, however, growing numbers of cases have been filed outside the US. At least 13 cases have been filed before both courts and administrative bodies in Europe, against European-domiciled carbon majors, and at least two challenges have been launched in Australia against the gas company Santos,” the report notes.
Recent analysis shows that cases against corporate actors are also becoming far more diverse. Although 16 of the 38 cases filed against corporate actors in the calendar year 2021 were filed against fossil fuel companies, more than half of cases were filed against defendants in other sectors, with food and agriculture, transport, plastics and finance all being targets in multiple cases, the report explains.
“While future trends are hard to predict with certainty, the increase in litigation against agricultural companies may suggest that other high-emitting sectors such as heavy-duty industry (e.g. steel and cement), textiles, shipping and aviation may be the next targets for litigants.”
Five areas to watch in the coming year, according to the report, are:
- Cases involving personal responsibility
- Cases challenging commitments that over-rely on greenhouse gas removals or “negative emissions” technologies
- Cases focused on shortlived climate pollutants
- Cases explicitly concerned with the climate and biodiversity nexus
- Strategies exploring legal recourse for the “loss and damage” resulting from climate change.