In the wake of the COP26 conference in Glasgow, we look at trends in the area of climate change litigation and how such cases could be much more commonplace in the coming years.
COP26
The 26th UN Climate Change Conference of the Parties that took place in Glasgow was widely accepted to be critical to achieving the goal of limiting warming to 1.5 degrees above pre-industrial levels. The Conference, delayed since November 2020, was also the first test of the “ratchet mechanism” contained in the Paris Agreement, which requires parties to submit more ambitious nationally determined contributions (NDCs) every five years.
Parties were asked to come forward with ambitions NDCs that align with the goal of reaching net zero by the middle of the century. However, despite a number of countries recently announcing net zero targets, a UN Climate Change Report found that the combined updated NDCs submitted by all Parties up to 12 October 2021 would result in a global increase in GHG emissions in 2030 of about 16% compared to 2010 levels, while the Emissions Gap Report 2021 found that NDCs and other mitigation measures would result in temperature rise of 2.7 degrees by the end of the century.
As a result of slow action on climate change from both governments and corporates, climate change litigation has become an increasingly important tool for those seeking to hold governments and emitters to account, and force concrete action on climate change. In a report released in July 2021, the Graham Research Institute on Climate Change and the Environment and Centre for Climate Change, Economics and Policy, London School of Economics and Political Science (Graham Report) found that 1,841 climate change cases had been filed globally at 31 May 2021, over double those identified in 2017. The Report also found that 58% of all climate cases had outcomes favourable to climate change action.
This article highlights a number of significant recent cases and trends identified in climate change litigation.
CONSTITUTIONAL AND HUMAN RIGHTS LITIGATION
According to the Graham Report, the use of constitutional and human rights arguments is an increasingly common feature of climate litigation, in part due to the widespread recognition that climate change is a human rights issue, and one that particularly affects indigenous and young people. In a number of recent decisions, the courts have accepted that constitutional and human rights considerations required both governments and corporations to take action.
The landmark decision in this area is the Dutch Supreme Court’s 2019 decision in Urgenda Foundation v State of the Netherlands, the first proceeding to successfully challenge a government’s approach to reducing emissions.In its decision the Court held that the Netherlands had a duty of care to protect its citizens from climate change based on its obligations under the European Convention on Human Rights (ECHR). The Court accepted the threat posed by climate change amounted to a real and immediate risk to the right to life and the right to family life in articles 2 and 8 of the ECHR, requiring the State to take reasonable and appropriate measures to prevent it. Accordingly, the Court upheld the lower courts’ ruling that the Netherlands had to reduce its greenhouse gas emissions by at least 25% compared to 1990 levels by the end of 2020.
In Milieudefensie v Shell Netherlands the claimants sought to extend the reasoning in Urgenda to private corporations. On 26 May 2021, the Hague District Court ruled that Shell was required to reduce its CO2 emissions across all its portfolios by 45 % compared to 2019 levels by 2030.
The Court found that this obligation resulted from the unwritten standard of care in the Dutch Civil Code, which provided that acting in conflict with what is generally accepted according to unwritten law is unlawful. In reaching this decision the Court relied on the ECHR rights identified in Urgenda, the UN guiding principles (a non-binding instrument reflecting current insights on the responsibilities of states and businesses in relation to human rights) and scientific consensus on what was required to prevent dangerous climate change.
It held that the obligation to reduce emissions applied regardless of the fact that Shell’s emissions occurred globally; that it was complying with prevailing laws and regulations on emissions; and that its emissions might be taken on by competitors. The case is significant in imposing specific obligations on a corporation, and extending the emission targets in the Paris Agreement to it.
Another important recent decision assessing the adequacy of emissions reduction targets is the German Federal Constitutional Court’s judgment in Neubauer v Germany, released on 29 April 2021. In that case, the Court held that parts of the Federal Climate Protection Act were incompatible with fundamental rights as they lacked sufficient provisions for reducing emissions cuts from 2031 onwards. The Court accepted the argument made by the youth plaintiffs that the Act prejudiced future generations by offloading the major burden of reducing emissions to after 2030 and ordered the German legislator to enact new reduction targets by the end of 2022.
TORT LAW
Despite tort law playing an important role in the decisions in the Urgenda and Millieudefensie proceedings, the Graham Report only identified six cases where claimants sought to rely on tort law to impose liability, noting that this might be due to the numerous hurdles faced by claimants seeking to rely on negligence.
Despite these difficulties, in Sharma by her litigation representative Sister Marie Brigid Arthur v Minister for the Environment the Federal Court of Australia accepted that there was a duty of care on the Minister for the Environment not to cause personal injury to the children in the specific context of her exercise of a power under the Environment Protection and Biodiversity Conservation Act 1999 to approve the extension of a coal mine. In holding that a novel duty of care should be imposed, the Court accepted that:
- a reasonable person in the Minister’s position would foresee that each child was exposed to a real risk of death or personal injury from heatwaves induced by climate change, and from the increasing extent and ferocity of bushfires in Australia;
- this harm was a reasonably foreseeable consequence of approving the extension project;
- the Minister had a significant measure of control over the harm; and
- the children were extremely vulnerable to a real risk of harm from climate change.
However, the Court refused to grant injunctive relief, noting that it was not satisfied the claimants had established a reasonable apprehension that the Minister would breach its duty.
The opposite approach was taken by the New Zealand Court of Appeal in its recent decision in Smith v Fonterra, released on 21 October 2021. The Court emphatically rejected the applicability of tort law, holding that the magnitude of the climate crisis “simply cannot be appropriately or adequately addressed by common law tort claims”. The Court considered that imposing tortious liability on New Zealand’s biggest emitters would be a major departure from fundamental principles and the incremental development of the common law.
PRIVATE LAW CASES
Claimants are also increasingly bringing case against companies as well as governments: the Graham Report identified at least 33 ongoing climate cases against the largest fossil fuel companies. These cases demonstrate an increasing focus on financial risks, fiduciary duties and corporate due diligence, and allegations of deliberate disinformation and failure to disclose and manage climate change risk.
One example of a case of this type is McVeigh v Retail Employees Superannuation Trust, a case brought by a contributor to the Australian superannuation found, alleging that the fund had breached its fiduciary duties due to its management of climate change risks and the disclosure of those risks. The case settled at the end of 2020 before a hearing, with the fund committing to implement a number of initiatives, including a long-term objective of achieving a net zero carbon footprint for the fund by 2050.
There has also been a number of regulatory advances in this area in the UK suggesting that increasing scrutiny and action by regulators is also likely. Of note is the FCA’s adoption of additional climate-related disclosure requirements for premium listed companies in December 2020; the Green Technical Advisory Group established earlier in the year to oversee the delivery of a common framework to specify the requirements for investments that can be defined as environmentally sustainable; and guidance published by the Competition and Markets Authority on 21 September 2021 on making environmental claims on goods and service, which includes principles intended to make businesses less likely to mislead consumers.
FUTURE TRENDS
The authors of the Graham Report considered that climate change litigation would continue to grow, predicting that the types of claims and defendants would continue to diversify, with claims likely focusing on financial markets actors, as well as governments and emitters failing to adopt serious strategies to aggress climate change, or mislead the public about their actions.
Given the scientific consensus on what is necessary to limit climate change, and increasing instances of defendants not challenging evidence from claimants about climate change, it appears likely that the focus of future cases will continue to shift from whether bodies should have reduction targets and what they should be, to whether they have properly put policies in place to achieve those targets.
If you have any questions about environmental law, please contact Tammy Evans.
