Lawyer Monthly - November 2021 Edition

35 NOV 2021 | WWW.LAWYER-MONTHLY.COM SURGING CLIMATE LITIGATION CALLS FOR BETTER DISCLOSURE to improve, scientists may be able to more to definitively tie extreme weather events to climate change. In time, this may fuel the emergence of further climate-related litigation cases. The issue with net zero claims In addition to being held increasingly accountable for their role in causing climate change, corporates with perceived insufficient or inadequate decarbonisation plans are also at increased risk of litigation – especially as companies increasingly choose to adopt their own net zero targets. As of early 2021, it was reported that 21% of the world’s 2,000 largest publicly listed companies had set net zero commitments. Yet some neglect to cover the full spectrum of Scope 1, 2, and 3 emissions, and often do not cover the entirety of their organisational operations. What is more, many organisations fail to disclose interim targets, which can lead to potential issues of credibility among investors and other stakeholders. This lack of adequate disclosure and incomplete coverage could leave companies and countries exposed to legal challenges regarding the efficacy of their commitments. A notable example is the landmark case brought against Royal Dutch Shell in 2019. The case – which was filed by several Dutch NGOs and more than 17,000 Dutch individuals – called for the courts to recognise Shell’s failure to reduce its greenhouse gas (GHG) emissions as unlawful act under tort law. The claimants requested Shell be forced to reduce its carbon dioxide (CO2) emissions by a net 45% relative to 2019 levels by year- end 2030. Despite Shell’s rebuttal, the trial court ultimately ruled in favour of the claimants after finding that the company’s transition strategy and associated targets were “intangible, undefined, and non-binding plans for the long term (2050)”, stating that Shell owed a duty of care to reduce its CO2 emissions across its entire global range of activities. There is a growing consensus that court orders for corporates to decarbonise more quickly could lead to greater financial and reputational risk – as well as bringing their strategic planning into question.