Jane Murray
General Counsel
Governments could see increased litigation challenging the ambition and implementation of climate policy responses, according to a new snapshot from LSE’s Grantham Institute.
At least 230 new climate cases were filed in 2023 the 'Global trends in climate change litigation: 2024 snapshot’ reveals, with many seeking to hold governments and companies accountable for climate action.
2023 saw major international courts and tribunals being asked to rule and advise on climate change. Even though just 5% of the climate cases have been brought before international courts, many of these could influence domestic proceedings.
Government frameworks
Around 15 cases were filed against government frameworks in 2023, totalling 110 since 2015, and significant successes could drive further increases. Two landmark verdicts – ‘KlimaSeniorinnen and Others v Switzerland’, and ‘Held v Montana’ – may encourage other organisations to follow suit.
In Switzerland’s case, the European Court of Human Rights confirmed that the Swiss government’s failure to act on climate change violates the European Convention on Human Rights (ECHR). Specifically, the ECHR held that there had been a violation of the right to respect for private and family life and right to a fair trial, Article 8 and Article 6 respectively.
The judgment stresses the importance of carbon budgets, climate policies and Greenhouse Gas reduction plans. The Court further clarified that once a member state has set its own targets in line with the Paris Agreement it must achieve them if capable of doing so.
Similarly, the Montana state trial court in the US noted that Montana’s policies contribute to climate change and harm the environment, infringing on citizens’ constitutional guarantee to a clean and healthful environment. Notably, this is only a first instance ruling and is subject to appeal.
Read the ‘Global Trends in Climate Change Litigation: 2024 snapshot’.
In both cases, the importance of scientific arguments and compelling scientific evidence relating to climate change is highlighted in reaching a successful outcome, particularly given the issues around standing and causation that have been challenges for similar cases.
The Grantham Report is a timely reminder that a broad and objective view of the many aspects of law that underlie climate litigation is necessary for investors.
Corporate litigation
The number of cases concerning ‘climate-washing’ has grown in recent years. About 47 such cases were filed in 2023. Notably, these cases have met with significant success, with more than 70% of completed cases decided in favour of the claimants.
There are also increases in ‘polluter pays’ cases, an important consideration for investors in assessing long-term risk.
Equally important to note in terms of risk assessment is that this year's report includes a new category of 'transition risk' cases, which includes cases filed against corporate directors and officers for their management of climate risks.
Shareholders of Enea, a Polish energy company, approved a decision to bring such a case against former directors for planned investments in a new coal power plant.
Overall, transition risk cases are still emerging but are gaining prominence as a distinct category focused on prudent climate risk management by corporations. Their future development and outcomes will likely influence the understanding of directors' duties.
USA divergence
Trends diverged between the USA and other countries. In their reporting this year, the Grantham Institute introduced two categories – 'climate-aligned' cases and 'non-climate-aligned cases'. The former has been filed for pro-climate outcomes, the latter being the anti-climate cases we are more used to hearing about.
Unsurprisingly, there is a significant divergence between climate litigation trends in the US and other countries. For example, the US has seen more non-climate-aligned cases challenging the integration of climate risk into financial decision-making.
Most cases in the rest of the world sought to hold governments and companies accountable for inadequate actions and ambition in tackling the climate crisis, even if the litigation was not particularly climate-aligned.
One in five climate-related cases filed in 2023 included a non-climate-aligned argument, with an overwhelming majority filed in the US.
This difference between the US and other parts of the world has seeped into regulatory approaches. While the European Union and other regions are introducing laws to channel investment into greener initiatives, the US faces significant hurdles.
Anti-climate trends
Even though only 50 of the 233 cases filed last year were not aligned with climate goals, they did make their presence felt with four new trends: ESG backlash cases, strategic litigation against public participation (SLAPP) suits, just transition cases, and ‘green v green’ cases.
'Green v green' litigation involved climate-aligned initiatives hampering the environment. Examples included renewable energy projects such as offshore wind farms, which were introduced on climate grounds but threatened species like whales.
Roughly 30 cases sought to hold companies accountable for climate-related harm allegedly caused by their contribution to greenhouse gas emissions. These cases were categorised under ‘polluter pays’.
Just transition cases focused on challenging the distributional impacts of climate policy or the process by which policies were developed, generally on human rights grounds. Meanwhile, SLAPP cases were filed against NGOs and shareholder activists to deter them from pursuing climate agendas.
2023 saw several new just transition cases filed, including cases focused on climate change adaptation measures.
Looking ahead
The report points to three possible future trends in climate litigation: post-disaster cases, ecocide and criminal law, and environmental and climate litigation synergies.
Legal disputes are increasingly emerging over recovery efforts following climate disasters, a trend that is expected to grow as these events become more frequent and intense.
The concept of ecocide is gaining traction, with Belgium and proposed EU directives addressing environmental crimes, potentially influencing future litigation.
Additionally, the incorporation of climate argument in environmental cases, such as those concerning plastic pollution, indicates a convergence of legal approaches. Underscored by scientific evidence highlighting the interconnectedness of these challenges.
Seen in context
Anti-ESG challenges over the last 24 months, particularly in the US, have created a focus on certain aspects of the law (largely antitrust and fiduciary duty) as it concerns climate and financial risk.
Whilst these challenges continue in an increasingly politically polarised landscape, the Grantham Report is a timely reminder that a broad and objective view of the many aspects of law that underlie climate litigation is necessary for investors making proper and prudent consideration of the economic risks associated with climate.
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