TLDR on Climate Litigation Trends from the NGFS

The Network for Greening the Financial System (NGFS), an organisation that facilitates collaboration among central banks and financial regulators globally, recently released a report entitled Climate-related litigation: recent trends and developments. It’s not a long read, but here’s the TLDR version we put together:

• There is an increase in climate litigation across the board for states and public entities, non-financial corporations, and financial institutions.

• Claims have been brought against companies in fossil fuels and energy, transportation, mining, agriculture and food, plastics, construction, and building materials.

• Claims against states and public entities focus on:

  • Systemic climate litigation - states are failing to address climate-related human rights,

  • Decisions incentivising third parties - states are allowing fossil projects to proceed,

  • Procedural obligations - states must provide data and transparency, and

  • Supervisor obligations - regulators should be regulating

• Claims against non-financial corporations focus on:

  • Human rights

  • Tort law, aka public nuisance

  • Due diligence on risk disclosures

  • Damages linked to GHG emissions (which is increasingly possible with advancements in attribution science)

  • Greenwashing, aka misleading customers

  • Company law, where NGOs become shareholders and claim that company is not meeting fiduciary obligations

• Legal risks include increases in litigation costs

• Claims against financial institutions focus on:

  • Greenwashing

  • Breaches of directors’ duties

  • Violation of corporate due diligence laws

• Finally, NGFS advise that climate-related litigation will increase and likely expand beyond climate change to biodiversity loss.

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