Recent years have seen private individuals and NGOs increasingly using the courts to enforce rights in the climate sphere.  This seems to be a trend that is only going in one direction and represents a risk of which Governments and corporates alike are going to need to be increasingly aware.  Members of the Arthur Cox ESG practice recently explored developments in this area with colleagues from the Netherlands, Germany and France at a workshop at the Energy Law Group’s Biennial Energy Event.

We explored common climate action litigation trends and distinctions, sharing insights from some of the truly game-changing decisions that have emerged. We identified how to enable our clients to develop sustainably, including by mitigating and managing litigation risk along the way.

Climate action litigation is a very dynamic area and may present itself in many ways:

  • applications for judicial review of Government plans and sectoral strategies

In Ireland, the Supreme Court quashed the National Mitigation Plan for falling “well short of the level of specificity” needed to comply with Ireland’s Climate Act.  A challenge to the Department of Agriculture’s strategy, Food Vision 2030 – A World Leader in Sustainable Food Systems, is underway.

  • actions pleading that harmful climate change, resulting from failure to adequately decrease GHG emissions, are impinging citizens’ rights under Articles 2 and 8 of the European Convention on Human Rights, UN treaties, and/or national Constitutions

In the Netherlands, the Supreme Court ordered the State to reduce emissions by at least 25% compared with 1990 levels by the end of 2020. The Court considered that this was not interference in the political realm because the method of emissions reduction was left up to the State. In Germany, the Court ordered the State to strengthen its Climate Act.  It reached a finding that the freedom to emit carbon had to be shared with future generations; disproportionately leaving the task of radical emissions reduction until after 2030 would impinge on the fundamental freedoms of future generations.  

  • applications for judicial review of development consents and permits (including renewals) for energy and infrastructure projects, based on alleged breaches of the EIA Directive and failure to consider a project’s significant effects on climate 

In Ireland, numerous projects contributing to energy transition are subject to court challenges which allege breaches of the Environmental Impact Assessment Directive.

  • challenges to financing decisions

The Court of Justice of the European Union ruled that the EIB was required to accept a petition from an environmental NGO to review its decision to finance a Spanish renewable energy (biomass) power plant.  Appeal proceedings are ongoing.

  • interventions by advertising standards authorities in respect of green claims

The UK Advertising Standards Authority found a breach by HSBC UK Bank plc in that, while the claims it made around environmental credentials were correct, its advertising failed to contextualise the claims against the broader sphere of the bank’s activities.

  • challenges to statutory decision-makers, alleging breach of statutory obligations to perform functions in a manner consistent with the climate governance framework and in compliance with specified emissions ceilings

More sophisticated statutory governance frameworks are bringing obligations to reduce emissions firmly into the decision-making process of Government departments and bodies.

Common themes led to discussion around several questions.  They included the question of standing: who gets to bring challenges – NGOs, individuals affected by flooding or air pollution, shareholders, or competitors? Which jurisdictions permit class actions and claims for damages as a result of climate change? How do the Courts deal with the question of causation and remoteness in the context of civil climate action claims? Is there a duty to take action to prevent harmful climate change, and who has it? How do the Courts ultimately decide whether a duty exists and whether a State or a company has done enough to comply with it? Do Courts impose fines or award damages for failing to comply with carbon reduction commitments? If they do, is there a reluctance to provide such a remedy where concrete steps towards carbon reduction is what is really required.

Common arguments that colleagues came across were discussed.  They included that corporates’ emissions reduction plans should have specific actions that are measurable, time bound, and subject to continual monitoring and reporting.  They also included arguments that new projects – even where the aim is to contribute to carbon reduction – will prevent or hinder the State from achieving climate goals.  There was an expectation, in the near future, of challenges by companies to the green claims of their competitors. 

To sum up, key trends were as follows:

  • vertical challenges to Government climate plans, sending States back to the drawing board on climate policy and action
  • horizontal challenges to project development consents and permits
  • actions seeking to establish liability for historic emissions, including whether an emitter in one jurisdiction can be held liable to an individual in another jurisdiction
  • judicial intervention to mandate emissions reduction outcomes and timelines on foot of fundamental rights in constitutions and international law (but not the means by which they are achieved)
  • challenges to require accurate climate reporting, including by telling the full story around your investments and activities