Broadening range of sectors are facing increasing climate change litigation worldwide
Published on 13th Jun 2022
It is not just 'carbon majors' that are being sued for climate change-related damage around the world: directors of companies in other industries need to prepare for the possibility of litigation in the future
The London School of Economics and Political Science has recently analysed global climate-related claims issued in 2021 against private companies and directors in order to discover which sectors are facing the greatest number of claims.
As might be expected, the so-called carbon majors (around 90 energy and cement companies) have faced more environmental litigation than any other type of industry. But, interestingly, climate litigants are increasingly targeting companies in other sectors too.
Food and agriculture and plastics sectors targeted
After the carbon majors, the sector facing the most litigation in the US, Australia and Europe is food and agriculture. That ties in with the high levels of contributions to greenhouse gas emissions by this sector, coupled with low levels of investment in mitigation strategies. It also arises from an increase in "value chain climate litigation", which targets companies for the acts and omissions in their supply chains.
For example, indigenous people from the Amazon have brought a claim against a French supermarket for sourcing beef from slaughterhouses that used suppliers said to be responsible for at least 50,000 hectares of deforestation between 2008 and 2020. Under French law there is a duty of vigilance written into the French Commercial Code (requiring companies to identify risks and prevent serious violations of human rights, health and safety and the environment), although there is currently no equivalent provision in England. No judgment has yet been reached.
The plastics sector (which is increasingly facing governmental measures – for example the introduction in the UK of a new plastic packaging tax on 1 April 2022, which we have previously written about) is also experiencing rising litigation.
Other sectors that have been targeted by climate activists include the transport and finance sectors. Climate change against the transport sector has so far tended to focus on an alleged failure adequately to commit to the phasing out of internal combustion engines. The finance industry is being targeted in relation to its key role in the transition to a low-carbon economy.
Osborne Clarke comment
To date, no case has yet been brought in the UK which has found a UK company or director liable for climate change-related damage. However, we have previously written about what claims in future might look like and their chances of success.
Although the targets of climate change litigation around the world are broadening, the claims themselves are much as we previously anticipated. Generally, claims are often based either on "greenwashing" (where a company markets itself, or makes representations, that it is doing more to protect the environment than it really is) or on a breach of corporate human rights responsibilities.
While it is clear that certain sectors face a higher risk of potential litigation due to the nature of their commercial activities, few sectors will be completely immune.