Sharp rise in number of climate lawsuits against companies, report says

08 07 2024 | 15:17Antonia Langford

The number of climate lawsuits filed against companies around the world is rising swiftly, a report has found, and a majority of cases that have concluded have been successful.

About 230 climate-aligned lawsuits have been filed against corporations and trade associations since 2015, two-thirds of which have been initiated since 2020, according to the analysis published on Thursday by the Grantham Research Institute on Climate Change and the Environment.

One of the most rapidly growing forms of litigation is over “climate-washing” – when companies are accused of misrepresenting their progress towards environmental targets – and the analysis found that 47 such cases were filed against companies and governments in 2023.

As climate communications are increasingly scrutinised, there has been arise in climate-washing litigation, often with positive outcomes for those bringing the cases. Of the 140 climate-washing cases reviewed between 2016 and 2023, 77 have officially concluded, 54 of which ended with a ruling in favour of the claimant.

More than 30 cases in 2023 concerned the “polluter pays” principle, whereby companies are held accountable for climate damage caused by high greenhouse gas emissions. The authors also highlighted six “turning off the taps” cases, which challenge the flow of finance to areas which hinder climate goals.

The US accounted for the vast majority of litigation cases filed in 2023, with 129 cases. The UK was second, with 24 cases, while 10 were filed in Brazil.

Climate litigation cases were filed for the first time in Panama and Portugal in 2023. This means that 55 countries have now recorded climate cases, with a growing number of litigation cases arising in the global south, which accounts for about 8% of all cases.

While the majority of climate litigation cases are still filed against governments, an increasing number are being filed against companies, with an imbalance between the US and the rest of the world – 40% of cases outside the US were filed against companies, while in the US just 15% of cases involved companies.

The authors cautioned that while “some types of cases, such as government framework cases, have already had lasting impacts on domestic climate governance … the long-term implications of other case types, such as climate-washing cases, remain unclear.”

A report published by the UN environment programme (Unep) and the Sabin Center for Climate Change Law at Columbia University last year highlighted the importance of litigation for climate action around the world.

“Climate litigation … has become an undeniably significant trend in how stakeholders are seeking to advance climate action and accountability,” said Andy Raine, the head of international environment law at Unep.

One of the most prominent litigation cases of 2023 was the Montana ruling, where a judge ruled in favour of young Montana residents’ claims that state officials had infringed on their right to a clean and healthy environment by promoting fossil fuels.

Last week, the UK’s supreme court handed down a landmark judgment ruling that the emissions impact of burning coal, oil and gas should be factored into planning applications for new extraction projects, after a local campaigner challenged Surrey county council’s decision to give planning permission to an oil-drilling well at Horse Hill.

Lawsuits against companies are less established, but have met with some success in shifting corporate behaviours. Shell, the Dutch airline KLM and the Australian oil company Santos are just a few of the targets of a plethora of climate-related legal challenges in the private sector.

Last year, a paper published by the London School of Economics and Political Science showed that climate litigation filings or unfavourable court decisions reduced firms’ value on the stock market by an average of -0.41%