The legal battles changing the course of climate change

Litigation can also cushion a country's climate policy from political fluctuations. A recent far-right victory in the Netherlands' general election has raised concerns that the country's climate policy could be watered down. But the Urgenda decision set a minimum threshold for what the government must achieve.

"Judges are in an ideal position to adjudicate these types of issues because they can independently assess whether the government or corporation is creating a dangerous situation," says Sarah Mead, co-director of Urgenda's Climate Litigation Network. "And they can do so beyond the vagaries of the electoral cycle."

Extent of influence

Sometimes a legal victory goes on to have an impact well beyond its original borders.

A recent court ruling in the US, where 16 young people successfully argued that the state of Montana had violated their constitutional right to a "clean and healthful environment" by promoting the use of fossil fuels, was specific to the state's law, so does not set a direct legal precedent elsewhere. But law researchers such as Sarah Everhart, a law professor at Widener University, Pennsylvania, have said these developments give fuel to a growing US movement to add green provisions into state constitutions. This both clarifies government duties and gives campaigners a stronger legal basis on which to challenge a lack of climate action.

Many cases still fail, however, leaving campaigners to deal with the financial fallout, risks to their reputation and sometimes setting unhelpful legal precedents. ClientEarth, for example, recently lost its novel attempt to sue the board of Shell over the company's management of climate risks, and now faces a significant legal bill.

The enforcement issue

The direct influence of litigation can be difficult to untangle and is not always immediately positive. In both the UK and Ireland, campaigners are returning to court because they consider previous judgments challenging government climate policy have not been properly implemented.

Enforcement is a serious problem in some jurisdictions. Colombia's Supreme Court was celebrated for ruling in 2018 that the government must protect its part of the Amazon from deforestation for future generations. The Bogotá-based non-profit Dejusticia notes that serious deforestation continued until a change of government in 2022.

Even unsuccessful litigation, however, "can shape narratives around climate action, encouraging decision-makers to change their approach", the LSE report concluded.

For example, teenager Anjali Sharma failed in her attempt to establish through the courts that the Australian federal environment minister had a legal duty of care to protect young people from climate change. But she encouraged independent senator, David Pocock, to introduce a bill which, if passed, would require governments to consider the wellbeing of current and future children when making decisions that are likely to contribute to climate change.

More generally, experts say climate litigation helps raise awareness about the climate crisis and gives a boost to civil society. A YouGov poll on behalf of global civic group Avaaz found strong public support for a lawsuit brought by six young Portuguese people against 32 governments, which was heard at the European Court of Human Rights in late 2023. That case was unsuccessful, though the Court has now found in favour of another human rights climate case brought by a group of older Swiss women (see factbox above: Climate inaction and human rights).

The Irish Climate Case, meanwhile, has gathered a petition of over 12,000 signatures before winning at the Supreme Court in 2020. Clodagh Daly, manager of Community Law & Mediation's Centre for Environmental Justice who was closely involved in the case, says the final judgment mobilised climate activists in Ireland and legitimised their demands.

Changing the narrative

Setzer sees litigation as a "powerful storytelling tool", which can do more than science alone to communicate the problem and its underlying causes.

Successful litigation against governments has also planted the seeds for lawsuits against corporations. One of the most important so far was brought by Dutch NGO Milieudefensie against Shell. In 2021, the court ruled that Shell must cut its CO2 emissions by 45% compared to 2019 levels – a decision the fossil fuel firm is appealing.

Eline Zeilmaker, senior legal advisor on the case for Milieudefensie, says the ruling shifted the way in which the Dutch press covered the climate crisis "and it made people aware that corporations have a key role to play and they have to act now".

The Shell case inspired other lawsuits, including one against Italian oil major Eni. Beyond the fossil fuel industry, an Indonesian island threatened by rising sea levels has started legal action against Swiss cement producer Holcim.

Claims against marketing greenwash have arguably been some of the most effective in making tangible changes. Earlier this year, European dairy company Arla Foods was banned from using the phrase "net zero climate footprint" when marketing its products in Sweden after a court ruled it had misled consumers. And Austrian Airlines was required by a court to post a message on its website's homepage and social media saying it had misled the public with adverts offering CO2-neutral flights.

As well as seeking to hold polluters accountable, campaigners say the aim of litigation is to shift wider corporate behaviour – and there is evidence this is now happening.

Following the success of its Shell case, Milieudefensie threatened 29 multinational corporations with legal action if they did not publish ambitious climate plans. Later that year, one of the targeted companies, Dutch retailer Ahold Delhaize, significantly increased its corporate target to cut CO2 emissions. In particular, it aimed to reduce emissions from the supply chain of its supermarket brand Albert Heijn to 45% by 2030, compared with 2018 levels. Its previous goal had been a 15% reduction. Ahold Delhaize tells the BBC that its increased ambition was not related to Milieudefensie's campaign, and that it had already been working on revising its strategy in line with the latest climate science.

Milieudefensie is continuing to heap pressure on corporations, announcing that it has now chosen five financial institutions as potential litigation targets.

Ingrid Gubbay, European head of human rights and environmental law at law firm Hausfeld, says litigation has been a big driver of corporate climate risk management in recent years. "These things are rattling the private sector, as they are policymakers."

A study by the LSE found litigation posed a real cost risk to fossil fuel firms because it lowered their share prices. The stock market responded most strongly in the days after cases against carbon majors, which include the world's largest energy, utility and materials firms, cutting their relative value by an average of 0.57% after a case was filed, and by 1.5% after an unfavourable judgment.

There is no published research yet investigating the long-term impacts of climate litigation on corporate value. Nor is there any evidence that big fossil fuel firms have significantly changed their business models in response. Earlier this year Shell dropped a target it had set in 2021 to cut oil production gradually for the rest of the decade. Shell tells the BBC that this was because it met its goal for cutting production for 2030 early.

However, Setzer notes that even modest share price drops are a big deal for investors, banks and companies because of both the financial and reputational costs.

As a result, climate litigation is increasingly being viewed as a serious issue by financial institutions. At a recent conference, Frank Elderson, member of the European Central Bank's executive board, said it was becoming "a major source of risk that needs to be properly anticipated and addressed".

In May this year, the French bank BNP Paribas announced it would stop funding new gas projects. That came just a few months after campaigners sued the bank for financing fossil fuels in the first climate-related lawsuit against a commercial bank, a case that has not been dropped.

Gubbay says climate litigation in Europe has been one factor driving the development of new corporate sustainability laws. And lawyers expect it to be a recurring theme in annual reporting as companies around the world become subject to stricter disclosure rules. BP's climate-related financial disclosures report from April, for example, says legal proceedings could reduce its financial liquidity and credit ratings.

Even insurance companies are concerned. The Hawaii-based fossil fuel firm Aloha Petroleum sued its insurer for refusing to cover climate lawsuits against the company, in one of a small but growing number of such cases.

However, the UNEP and Sabin Center report also warned of a growing legal backlash that could delay climate action.

In the US, concerns have long been raised that companies working together on climate change could be hit with anti-trust lawsuits that penalise early movers and stymie further action. This has been a key tension point within an ailing industry net-zero alliance.

In some countries, vulnerable workers and communities are challenging action on climate change that they say disproportionately harms them and are not part of a just transition. The Mexican Center for Environmental Law, for example, is suing the Mexican government, arguing it has not considered how its energy sector programme for 2022-36 will improve overall wellbeing, reduce negative social and environmental impacts and guarantee human rights.

Companies are also seeking compensation for government climate policies through controversial dispute settlement systems embedded within investment treaties.

For example, in response to Queensland Land Court's recommendation on the Waratah coal mine, Palmer has begun legal action against the Australian government under a free trade agreement with Singapore. His Singapore-based company Zeph investments, which owns Waratah Coal, is claiming A$69bn ($45bn/£36bn) in compensation, alleging the judge had a biased "pro-climate change, anti-coal" stance.

A UN expert has called for an end to these secretive court systems, saying they are delaying progress on climate change and other environmental crises and having "enormous impacts on human rights".

Setzer says courts are being used as battlegrounds, with litigation a weapon for both sides. "How long this will last, I don't know. But for now it's had more impact than the many climate laws that have been passed. It has become the transnational movement that many would have wanted."