News & Views

Climate Change Litigation – Are Companies and States Getting Sued?

28 May 2021

Authors: Helen Lehto, Klaus Metsä-Simola, and Anna-Maria Tamminen

In brief, the answer is yes; around the world, companies and states alike are seeing themselves sued on grounds pertaining to failure to live up to the targets which have been set for emission reduction in e.g. the Paris Agreement. What is more, the claimants – private individuals and NGO’s alike – sometimes end up winning.

States have seen themselves sued on these grounds a number of times in the past. In this respect, the most notable court case is the Urgenda case, in which the Dutch Supreme Court stated on 20 December 2019 that the Dutch government has a human rights-based obligation to reduce emissions by at least 25% by 2020 (compared to the 1990 levels) in order to prevent global warming from exceeding 2⁰C.

Since then, many other cases have followed. Until recently, the successful cases imposed obligations on states. Now, however, an NGO has for the first time won a significant climate change litigation against a major company. In a landmark judgment handed down by the Hague District Court on 26 May 2021, the court ordered Royal Dutch Shell to reduce the CO2 emissions of the Shell group by net 45% in 2030, compared to 2019 levels, through the Shell group's corporate policy. It remains to be seen how the case will ultimately play out, taking potential appeals into account.

While the Dutch laws around class actions have been identified as one of the primary reasons for why many of the successful climate change litigations have taken place in the Netherlands, it would be a mistake to conclude that businesses in other countries would be immune to climate change litigation. In fact, many similar cases have either succeeded in, or are currently pending before, several other courts around Europe. In Estonia, an NGO is seeking to nullify a permit issued to a state-owned energy group for the construction of a new oil plant. In the US, an oil company’s board members are being unseated by a dissident shareholder group concerned about the company in question not doing enough to combat climate change. In a case currently pending before the European Court of Human Rights, Portuguese youth have filed a complaint against 33 countries, most of them EU member states. The Federal Constitutional Court in Germany recently ordered the legislature to set clear provisions for reduction targets from 2031 onwards by the end of 2022. These are but a few examples.

The case law in this field is rapidly growing and one can already begin to see some common denominators as well as separators between the cases with respect to e.g. standing, causality and admissibility. Still, many different approaches to combat climate change through litigation are currently being tested, and there is no one set formula for this.

Will we see climate change litigation in the Nordics? Absolutely. In what shape? That remains to be seen.

Stay tuned for a more comprehensive overview of past and present climate change litigation trends in an upcoming episode of the Legal Trends by Hannes podcast. The podcast can be found on all of the usual platforms such as Spotify, Google and Apple Podcasts.