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Grantham Research Institute Report Highlights Sharp Increase in Climate Lawsuits Against Companies




The surge in climate lawsuits against companies worldwide is gaining momentum, with many cases concluding in favour of the claimants, as highlighted in a recent report.

 

Since 2015, approximately 230 climate-related lawsuits have been brought against corporations and trade associations, with two-thirds of these cases filed since 2020. This trend is detailed in analysis from the Grantham Research Institute on Climate Change and the Environment, released on Thursday.

 

A significant portion of these lawsuits involves accusations of “climate-washing,” where companies are charged with misleading the public about their environmental efforts. In 2023 alone, 47 such cases were filed against companies and governments. The report examined 140 climate-washing cases between 2016 and 2023, revealing that 77 cases have concluded, with 54 rulings favouring the claimants.

 

The "polluter pays" principle is also becoming increasingly relevant, with over 30 cases in 2023 holding companies accountable for excessive greenhouse gas emissions. Additionally, six critical "turning off the taps" cases were filed, challenging financial support for projects that hinder climate goals.

 

In 2023, the United States led with 129 climate litigation cases, followed by the UK with 24 and Brazil with 10. Panama and Portugal also joined the climate litigation arena for the first time, bringing the total number of countries with recorded climate cases to 55. Notably, the global south is experiencing a rise in litigation, making up about 8% of all cases.

 

While most climate lawsuits target governments, there is a growing number of cases against companies. A disparity exists between the US and the rest of the world: outside the US, 40% of cases involve companies, compared to just 15% within the US.

 

The report’s authors caution that while some types of cases, such as those against government frameworks, have already significantly impacted domestic climate policies, the long-term effects of other types, like climate-washing cases, are still uncertain.

 

A report by the UN Environment Programme (UNEP) and the Sabin Center for Climate Change Law underscores the importance of litigation in advancing global climate action. Andy Raine, UNEP’s Head of International Environment Law, noted, “climate litigation has become an undeniably significant trend in how stakeholders are seeking to advance climate action and accountability.”

 

Among the notable cases of 2023 was a Montana ruling where a judge sided with young residents who claimed that state officials violated their right to a clean environment by supporting fossil fuels. Another significant ruling in the UK saw the Supreme Court mandate that the emissions impact of burning fossil fuels must be considered in planning applications for new extraction projects.

 

Although lawsuits against companies are still emerging, they are beginning to influence corporate behaviour. Major companies like Shell, the Dutch airline KLM, and the Australian oil company Santos have faced numerous climate-related legal challenges. Research by the London School of Economics and Political Science indicates that climate litigation filings or unfavourable court decisions reduce firms' stock market value by an average of 0.41%.

 

Climate litigation is on the rise, becoming a crucial mechanism for enforcing environmental accountability and driving changes in corporate and governmental policies around the world.

 

At CAFA, we empower membership organisations to assist their members, often companies, in taking decisive climate action and achieving net zero. We offer essential guidance, support with reporting, and foster community learning to help organisations effectively meet their sustainability commitments.


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