LexisNexis

The rising tide of climate litigation

Polly BotsfordMonday 12 July 2021

The Chuckegg Creek wildfire burns out of control in the High Level Forest Area in Alberta, Canada. 19 May 19. Picture obtained from social media/via REUTERS

Legal action against companies and governments relating to the climate crisis are increasing in number, scope and ambition. Global Insight examines the rise and rise.

On the north-eastern coast of the Netherlands is the Wadden Sea, an area of saltmarsh, dunes and a haven for migratory birds and seals. But rising sea levels – a result of the climate crisis – could wash away this landscape in years to come, along with many other low-lying areas around the world.

Just over 250 kilometres south of the Wadden Sea is The Hague, where two pivotal climate litigation cases were decided in 2019 and 2021 respectively. In both, claimants looked to force governments and the private sector to act now in order to stem the tides that threaten to sweep humanity away.

The first case was against the Dutch government and was heard in the historic centre of The Hague. In Urgenda Foundation v the State of the Netherlands in 2019, the country’s Supreme Court – agreeing with the decision of the appellate court – found that the state had a legal duty of care, based on international human rights principles, to take sufficient action to address climate change. By not doing so, the Court stated, there was a ‘risk of irreversible changes to the worldwide ecosystems and liveability of our planet’ and a ‘serious risk that the current generations of citizens will be confronted with loss of life and/or disruption of family life […] that the State has a duty to protect against’.

The Court even went so far as to specify what the Dutch state’s legal obligation was: it should set a policy to cut emissions by at least 25 per cent, compared to 1990 levels, by the end of 2020.

The second case was against Royal Dutch Shell Plc (‘Shell’), headquartered in The Hague, and was decided in May of this year. It resulted in an extraordinary judgment of the District Court of The Hague and built on the Urgenda case. In what experts have called a ‘global first’, by making a link between companies and human rights’ obligations, campaigners in the Shell case successfully argued that the energy giant, a corporate entity rather than a state, had also breached its duty of care stemming from human rights obligations by its contribution to global greenhouse gas emissions.

Peer de Rijk is Policy Officer at Milieudefensie, the Netherlands’ branch of Friends of the Earth, which led the case against Shell. He explains that ‘in the decision, the court said that companies have a responsibility to respect human rights, as formulated in the UN Guiding Principles [on Business and Human Rights], which is a global standard of conduct and is separate from a state’s responsibility. Once the court established this responsibility, then it concluded that the responsibility includes meeting the climate goals.’

Again mirroring Urgenda, the Court established that this duty of care looks into the future. It found that Shell will have acted unlawfully if it fails to reduce the aggregate volume of carbon emissions by 45 per cent – relative to 2019 emissions levels – by 2030. This may not be the last word in the case, however. A Shell spokesperson told Global Insight that Shell is ‘currently considering whether or not to appeal the decision’.

‘Unprecedented’ numbers

Incidences of climate litigation cases where the impact or the worsening of the climate crisis are the core issues, are increasing dramatically. Figures published in early July by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics show that there has been an ‘unprecedented’ number of key judgments ‘with potentially far-reaching impacts’ in the last 12 months alone.

Cases have almost doubled since 2015, according to the research. As it stands, there have been a total number of 1,841 cases identified across different jurisdictions around the world since 1986. But 1,006 of that total have been filed since 2015.

Not only is the number of cases rising, but the report also finds that strategic cases, where the aim is to influence policy and society beyond the interests of the immediate parties to the litigation, are increasing particularly acutely. Such claims were negligible in the 1990s, climbing to around ten per cent of cases by 2015. In 2020, however, they made up approximately 40 per cent of cases. Climate litigation in this context is a key driver of climate justice.

Litigation is also broadening to involve the private sector, third parties and financial services. In May, environmental public interest lawyers ClientEarth began legal action against Belgium’s National Bank for purchasing bonds in companies that are allegedly ‘fuelling the climate crisis’ and failing to consider the environment when buying assets. The Belgian National Bank declined to comment when approached by Global Insight.

As the research shows, 2015 was a pivotal moment for climate litigation. It was then that the Paris Agreement was hammered out at the UN’s headquarters in New York, with the Agreement signed in April 2016. Under the terms of what is a legally binding treaty (though with non-binding targets), 196 states agreed to keep global warming ‘well below’ 2°C relative to pre-industrial levels, while aiming for 1.5°C, and to foster ‘climate resilience and low greenhouse gas emissions development’.

Flames rise as firefighters and volunteers try to extinguish a fire burning in the village of Schinos, Greece. 19 May 2021. REUTERS/Vassilis Psomas

Flames rise as firefighters and volunteers try to extinguish a fire burning in the village of Schinos, Greece. 19 May 2021. REUTERS/Vassilis Psomas

The countries also agreed to draw up their own ambitious nationally determined plans to achieve this. Campaigners, such as those involved in the Urgenda and Shell cases, have successfully used the Agreement as a legal peg on which to hang climate justice claims.

The treaty was the backdrop to the Friends of the Irish Environment (FIE) v Ireland case in 2020. In this case, FIE successfully brought a claim against the Irish government, on the basis that its national plan to tackle climate change was not good enough to achieve what the Paris Agreement has stipulated is necessary to limit global warming, for instance, by not being specific enough. The Irish Supreme Court found several Irish government policies to be ‘excessively vague or aspirational’.

Similarly, the case of Notre Affaire à Tous and Others v Total, filed in 2019, is based on the claim that Total, the French oil giant, failed to publish a plan that would reduce emissions sufficiently to meet the Paris Agreement obligations. The case is ongoing. Total have said that they ‘regret’ the legal claims being brought and that ‘the solutions […] require cooperation among the various stakeholders’.

From legal point to policy change

Though it’s difficult to establish cause and effect here, it appears that the new wave of climate litigation cases are having policy consequences both for states and corporates. Following the Urgenda case, the Dutch government put forward policy measures to help the country reach the target of 25 per cent reduction in emissions by 2020. These included proposals submitted by the Urgenda Foundation itself and other environmental organisations, regarding significantly reducing the capacity of coal-fired power stations, subsidies for double-glazing, solar panels on school roofs and reducing speed limits.

As a consequence of the FIE v Ireland case, the Irish government has been forced back to the drawing board on its national plan. The Irish Supreme Court is expecting the revised plan to be ‘sufficiently specific’ so that any ‘interested member of the public’ can determine whether the plan meets the country’s emissions objectives.

Clients have been carefully monitoring these cases for some time and how best to prepare for possible future claims against them

Elisa de Wit
Partner, Norton Rose Fulbright

Following the decision against Shell, its Chief Executive, Ben van Beurden, made a statement in response on social media, declaring that the company would speed up its transition to net zero emissions by 2050. ‘This ruling does not mean a change, but rather an acceleration of our strategy [...] we will seek ways to reduce emissions even further in a way that remains purposeful and profitable’, he said.

Dennis van Berkel, Legal Counsel at the Urgenda Foundation, argues there is a strong indirect role in the dynamics of policymaking, and that these cases act as an ‘accountability mechanism’, filling an accountability gap. This is because states ‘will have to justify their actions and decisions (on inaction) before a court’.

Tessa Khan is co-founder of Uplift UK, which is campaigning to reduce the UK’s production of fossil fuels, and also a founder of the Urgenda Foundation. ‘The Shell case and others like it send a message to investors that those companies are not working in accordance with the government policy and the science if they don’t do something’, she tells Global Insight.

Coming clean on ‘green sheen’

A new angle in climate-related litigation is to focus on – and challenge – what is known as ‘greenwashing’. This is where, campaigners argue, advertising and PR campaigns put out by organisations on a company’s green credentials are at odds with the reality of how that company operates.

Elisa de Wit, a partner at Norton Rose Fulbright who heads the firm’s Australian climate change practice, warns that ‘these cases are going to become more prevalent where corporates are challenged on what they say they are doing as opposed to what they are actually doing’.

Many companies are setting a target of net zero emissions by 2050, she adds, ‘but that is not enough by itself. They are going to have to specify how they are, realistically and specifically, going to achieve that or there will be claims they are misleading the public’.

Perhaps one of the most far-reaching consequences of climate litigation could be if it becomes more difficult for companies to obtain approval for new or extended projects that are considered especially damaging in terms of emissions. Another startling case – decided in May 2021 – has been Sharma and Others v Minister for the Environment. This involved a claim brought against the Australian government over a proposed coal project in New South Wales. In the case, the Court found that the government needed to consider its duty of care to not cause harm to future generations of Australians when granting approvals for such projects.

Companies have been taking serious notes, says Elisa de Wit, a partner at Norton Rose Fulbright who heads the firm’s Australian climate change practice. ‘Clients have been carefully monitoring these cases for some time and how best to prepare for possible future claims against them’, she says. ‘They are watching for copycat cases in other jurisdictions and in different sectors. They can see how courts are defining a particular issue and look to mitigate future risk of claims.’

Case by case

What is particularly striking about climate litigation is that the cases have novel facets that are potentially far-reaching. For example, new plaintiffs are emerging to bring cases to court. The Sharma case saw a group of young people emboldened to bring a claim. Similarly, in the landmark case of Neubauer, et al v Germany, young activists took the German government to court for setting emissions targets too far in the future (see box: ‘It’s everyone’s business’ – recent case highlights 2020-21).

These cases involve new arguments that have been persuasive and are occurring in more jurisdictions as lawyers share tactics and know-how across borders. ‘Almost every legal system we’ve seen contains legal tools that can be used to hold governments to account for their insufficient action to combat the climate crisis’, says van Berkel.

This includes human rights-based tools because, as Leopoldo Burguete-Stanek, Programme Officer of the IBA Environment, Health and Safety Law Committee and a partner at Mexico City firm Gonzalez Calvillo, explains: ‘There is now a line of claims in relation to […] the protection of the human right to a healthy environment.’

The IBA identified the legal hurdles and issues in climate justice cases in a report in 2014, entitled Achieving Justice and Human Rights in an Era of Climate Disruption. It subsequently put together a model statute in order to overcome some of those hurdles, such as those concerning access to courts, evidence and disclosure.

Judges learn from other judges, Burguete-Stanek observes. ‘These climate cases will help other courts to become more knowledgeable about how these claims work and the principles at stake’, he says.

These climate cases will help other courts to become more knowledgeable about how these claims work and the principles at stake

Leopoldo Burguete-Stanek
Programme Officer, IBA Environment, Health and Safety Law Committee

Courts are prepared to take robust positions in a way that even a few years ago they might have shied away from. In a blog post in early June, Shell’s Van Beurden said he felt his company had been ‘singled out’ by the case against it and that this was a matter for all stakeholders, not just Shell. This was an argument that was also used in court: if the company that is the subject of litigation is forced to drastically reduce its oil and gas production, another producer will fill their space. The impact of these climate litigation cases on reducing overall production and emissions, then, would be very minimal.

The Court disagreed with this line, known as the market substitution argument. The Court stated that it ‘acknowledges that [Shell] cannot solve the problem on its own. However, this does not absolve [Shell] of its individual partial responsibility to do its part regarding the emissions of the Shell group, which it can control and influence’.

Curb your enthusiasm

The pattern of climate justice globally, however, is uneven. For instance, the US has the highest number of climate litigation cases by some margin, with 1,387 out of the total of 1,841. But some cases there are locked in a battle between state and federal jurisdiction, leading to what campaigners and claimants say are crucial delays.

In one recent hearing in May this year, the US Supreme Court found in favour of a number of energy companies including BP, Chevron, Exxon Mobil and Shell when it determined that cases brought against them by the city of Baltimore should be heard in a federal, not state, court.

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The charred remnants of vehicles, destroyed by a wildfire in Lytton, British Columbia, Canada. 9 July 2021. REUTERS/Jennifer Gauthier

Suzanne Spears is co-head of the Global Business and Human Rights Practice at Allen & Overy. She observes that ‘climate change litigation is taking multiple forms and there are different degrees of success depending on many factors, including, for instance, the constitutional set-up of a jurisdiction’.

She says that in the US, standing is much harder to establish for some plaintiffs against the government, and companies are not considered bound by constitutional and human rights norms in the same way as in, for example, the Netherlands.

Different jurisdictions are seeing diverse types of claims, such as against pension funds for not adopting climate change mitigation plans or divesting away from so-called ‘stranded assets’

Suzanne Spears
Co-Head of the Global Business and Human Rights Practice, Allen & Overy

‘Different jurisdictions are seeing diverse types of claims’, adds Spears, ‘such as against pension funds for not adopting climate change mitigation plans or divesting away from so-called “stranded assets”, or securities’ claims for misstatements and omissions about environmental matters’.

Meanwhile, in jurisdictions with some of the highest emissions globally – such as China – no climate litigation cases are being brought. It’s worth noting, however, that in respect of China, other types of environmental claims are making in-roads, such as environment-related prosecutions brought by state agencies. One study published in 2019 identified civil actions in China ‘steered by the government’s low-carbon policies’, as it puts it, where the courts are interpreting cases in line with government climate policy even if the actual matter before them is a private civil action.

Climate litigation cases depend on a robust and sophisticated court system to come to light so it’s no surprise that they are being played out in countries such as Australia, the EU Member States and the US, and that there are negligible cases where the rule of law and the judicial systems are much weaker. But campaigners argue that countries such as the US and those in the EU are very good places to start. ‘Courts can never provide the final answer, they can only act in systems where there is rule of law’, says van Berkel. ‘But the fact is that what governments are doing here in the EU is grossly insufficient’.

Courts don’t have armies, so we are dependent upon the constitutional courtesy of the executive to adhere to the judgments

Dennis van Berkel
Legal Counsel, Urgenda Foundation

Perhaps the most important limitation to these cases is enforcement. If a state or corporation does not meet its revised emissions targets, what then? ‘Courts don’t have armies’, concedes van Berkel, ‘so we are dependent upon the constitutional courtesy of the executive to adhere to the judgments’.

Despite these limitations, recent climate litigation cases are profound and extraordinary in their reach. Courts are challenging governments, corporations and third parties, alleging that they are not doing enough – and not soon enough – to combat the climate crisis. As leaders globally pack their bags for the next major climate conference, November’s COP26 in Glasgow, the rise and rise of climate litigation should provide a vivid backdrop to those discussions.

‘It’s everyone’s business’ – recent case highlights 2020-21

FIE v Ireland – July 2020

Friends of the Irish Environment successfully challenged the government’s National Mitigation Plan on the grounds that it was not sufficient to give effect to the domestic climate legislation, namely Ireland’s Climate Action and Low Carbon Development Act 2015.

Notre Affaire à Tous v France – February 2021

A case brought by the organisation Notre Affaire à Tous (translation: ‘It’s everyone’s business’). The Administrative Court in Paris found that the French government was liable under French and EU law for not taking enough action to meet its commitments to reduce greenhouse gas emissions. The Court did not specify what the state should do to repair the harm – that was a matter for further discussion. 2.3 million people signed a petition to support the case. The Court awarded a ‘symbolic sum of one euro for moral prejudice’ to the claimants.

Neubauer, et al v Germany – April 2021

The Karlsruhe, Germany’s Federal Constitutional Court, found that the measures of the government to combat climate change were insufficient to protect future generations, and that emission reduction targets were set too far in the future and would not meet the objectives laid down in the Paris Agreement.

Sharma and Others v Minister for the Environment – May 2021

Eight Australian children sought a declaration that there was a duty of care on the government not to cause them harm resulting from coal extraction and carbon emissions. The Court found that there was such a duty of care and that this potential harm was a mandatory consideration when determining whether to approve projects such as the extension of a coal mine in New South Wales. This specific project would increase total coal extraction from the site from 135 to 168 million tonnes (Mt), producing around 100Mt of carbon dioxide.

Milieudefensie et al v Royal Dutch Shell plc – May 2021

Though this case may yet be appealed, the Hague District Court found that corporates such as Shell have human rights responsibilities and that Shell, specifically, must reduce its carbon dioxide emissions by 45 per cent from 2019 levels by 2030 to help ensure that global warming is limited to 1.5°C.

Polly Botsford is a law and current affairs writer and can be contacted at polly@pollybotsford.com