Third Wave Climate Litigation – An Innovative Constraint for Corporations
In 2020 the atmospheric concentrations of carbon dioxide, methane and nitrous oxide were respectively 149%, 262% and 123% above pre-industrial levels.[1] These worrying statistics highlight the urgent and global nature of climate change, which inevitably requires new governance initiatives in order to address the growing threats arising from climate change.
Climate litigation, as a method of climate change governance, has grown in popularity exponentially as claims are pursued to attribute responsibility, claim damages and fill gaps. Impressively the number of climate change litigation cases has more than doubled since 2015.[2] This shift to climate change litigation is in part thanks to the courts’ legal creativity and willingness to evolve the law, but also due to insufficient legislation and regulation.
LSE and The Grantham Institute ‘Global Trends in Climate Change Litigation: 2021 Snapshot
The first and second waves of climate litigation focused on environmental compliance and government’s policies; whilst the third wave, starting in around 2015, has targeted corporations for a wide range of harms ranging from environmental commitments to tortious harms to greenwashing. A recent study established that only 100 corporations were responsible for 71% of global emissions since 1988.[3] Globalisation has led to an increase in corporations’ power, whilst simultaneously reducing the ability of states to regulate them. As a result, corporations are key contributors to climate change, not only indirectly through their emissions which lead to climate disasters such as flooding, but also directly through their commercial practices. A particularly poignant example is the displacement of communities and the violation of human rights to develop oil fields in Ogoniland,
Given an absence of legislation and regulatory standards, the Courts have had to use a wide array of sources of law along with creative legal basis to crystallise climate litigation and attribute responsibility. Perhaps the most famous of climate change litigation against corporations is the Milieudefensie et al. v Royal Dutch Shell Plc [2021] case.
In April 2019, seven NGOs and more than 17000 citizens as co-plaintiffs pursued Royal Dutch Shell (RDS) before the Hague District Court alleging that the corporation’s contributions to climate change violated their duty of care and human rights obligations. Milieudefensie claimed that RDS’ emissions contributed to dangerous climate change and resultingly violated its duty of care and Articles 2 and 8 of the ECHR. Although RDS is not party to the ECHR, Milieudefensie argued that RDS nonetheless has a moral and legal responsibility through the indirect horizontal transposition of Articles 2 and 8. The claimants, therefore, petitioned the court to 1. find that RDS was acting unlawfully, and 2. order RDS to reduce their emissions by 45% by 2030. The court ordered RDS to reduce its carbon emissions by 45% by 2030 although it did not find that RDS was acting unlawfully. This revolutionary judgment in May 2021 was based around the innovative use of tort law and the ‘unwritten standard of care’ in the Dutch Civil Code.[4] To establish this novel standard of care, the court took into consideration a wide variety of factors including international human rights treaties and soft law such as the UN Guiding Principles on Business and Human Rights. Commentators also signal the replicability of this case due to the international legal basis for the Court’s judgment which will undoubtedly have substantial knock on effects for corporations and climate justice. Most recently, German NGOs have filed a case against Volkswagen, BMW and Mercedes-Benz calling on them to stop producing internal combustion engine cars by the end of the decade, which will use this case as a legal basis.
Ogoniland, Nigeria
Another landmark case is Okpabi & Others v Royal Dutch Shell Plc [2021]. This case is amongst a series of landmark cases on the liability of parent companies in English law for claims relating to climate change and human rights violations. Although it is not a decision on the merits of the claim, but rather the threshold for jurisdiction, this case emphasises the increasing willingness of the Courts to lift the ever-weakening corporate veil to attribute responsibility. A claim was brought forwards by 42500 citizens from the affected region in the Niger Delta against RDS and its Nigerian subsidiary alleging that the subsidiaries pipelines caused substantial environmental damage. The claimants were seeking to hold RDS responsible for its subsidiary’s actions by arguing that they were owed a duty of care which was breached by RDS’ failure to prevent or remedy the environmental damage in the Niger Delta. The Supreme Court’s decision unanimously reversed the Court of Appeal’s decision and concluded that the case could proceed on its merits as it is arguable there was sufficient control and proximity for RDS to owe a duty of care on behalf of its subsidiary. The “unequivocal rejection of any ‘special’ category of claim” suggests a less strict and more claimant friendly approach to separate legal personality.[5] This focus on tort law to ‘bypass’ or ‘lift’ the corporate veil in order to attribute responsibility is growing in popularity and success as evident by the Vedanta and Unilever cases. It must be noted this case in no way signals a ‘carte blanche’ in claims against parent companies, but rather contributes to the trend of ensuring climate justice through tort law by remediating damages and attributing liability to the right party.
The ever-growing variety of climate litigation cases against corporations highlights its universally disruptive nature towards legal systems and orders which are forced to adapt and adjust in response to this. As a result of the passive development of climate change legislation, the courts cannot focus on a specific law, set of rights or legal regime. This diversification is a key strength as it allows for further creativity to mitigate and remediate climate injustice by corporations.
In conclusion, climate change litigation is a vital and innovative governance initiative to combat climate change abuses by corporations. Climate change litigation against corporations is gaining in popularity and will continue to play a vital role in addressing climate injustice; particularly as the body of law develops as we continue to grapple with corporations and the climate emergency in 2022.
[1] WORLD METEOROLOGICAL ORGANIZATION, Greenhouse Gas Bulletin 2020, No. 17 October 2021.
[2] SETZER, J. and HIGHAM, C. Global Trends in Climate Change Litigation: 2021 Snapshot, (2021).
[3] CARBON DISCLOSURE PROJECT, The Carbon Majors Database: CDP Carbon Majors Report 2017, July 2017.
[4] Dutch Civil Code, Book 6 (The Law of Obligations), Title 6.3 (Torts), Article 162.
[5] White & Case, Okpabi v Royal Dutch Shell Plc: UK Supreme Court Allows Nigerian Citizens’ Environmental Damage Claim to Proceed Against UK Parent Company, 19 February 2021.
