Explainer-Climate activists, companies lawyer up for courtroom battles

By Gloria Dickie

DUBAI (Reuters) – As global temperatures and emissions climb, people are increasingly turning to courtrooms to challenge fossil fuel companies’ activities, leading to wins on issues like “climate-washing” but also backlash as companies file countersuits.

In the last five years, the number of climate-related court cases that have been filed around the world more than doubled, according to a 2023 report by the U.N. Environment Programme (UNEP) and New York’s Columbia University, from 884 filed by 2017 to nearly 2,500 as of today.

A lawsuit “holds companies to account in a way that just protests or campaigns cannot do,” said Joana Setzer, a climate litigation researcher at the London School of Economics and Political Science (LSE).

Analysts say the strategy appears to be working, with more than half of cases with judicial outcomes leaning toward stronger climate action, according to a 2023 report from LSE.

“We have seen more ambition and more action from governments thanks to litigation,” Setzer said. 

Here are some key trends in climate litigation:

WHERE CASES ARE BEING FILED

Most of today’s climate lawsuits have been filed in the United States, including 20 filed by U.S. cities or states against major fossil fuel companies that are likely to go to trial.

Some U.S. cases, however, feature right-wing states challenging federal rules for requiring companies to disclose their environmental impacts.

About 17% of cases since 2017 have been filed in developing countries, while European courts are hearing several cases that experts say could set new legal precedents.

‘CLIMATE-WASHING’ IN FOCUS

Companies of all kinds are being challenged over alleged “climate-washing,” or misleading plans and statements related to tackling emissions.

Delta Air Lines (NYSE:.N) is facing a proposed class action lawsuit over allegedly violating California consumer protection laws by advertising itself as carbon-neutral.

“Climate litigation has really widened from large fossil fuel companies to this aspect of accountability and transparency,” Setzer said. “If you are able to make statements about ‘net zero’ or ‘carbon neutral’, then really these should be proven.” 

In 2021 and 2022, more than 50 climate-washing cases were filed globally against companies, up sharply from just 15 in the previous two years, the LSE report found.

COMPANIES STRIKE BACK

Companies are not only on the defense. They are also filing their own cases against governments with the aim to delay or dismantle regulations on climate action, the UNEP report said.

These so-called backlash cases include one filed by 26 Republican-led states, an oil drilling company and an oil and gas trade group, challenging a Biden administration rule allowing employee retirement plans to consider environmental, social or governance issues in their investment decisions.

Not all challenges succeed, though. After a judge in September upheld the rule, the plaintiff’s coalition said in October it would appeal.

In Europe, a court denied energy companies RWE and Uniper compensation for lost revenues from the Dutch government, after the Netherlands decided to close coal-fired energy plants by 2030.

Oil majors also have targeted climate protesters following a government crackdown on direct action in Europe, while Britain has made it illegal to lock or glue oneself to property as a protest stunt.

This month, Shell (LON:) filed a suit against Greenpeace seeking $2.1 million in damages after protesters in January boarded the company’s oil production vessel near the Canary Islands.

OTHER CASES TO WATCH

DUARTE AGOSTINHO AND OTHERS V. PORTUGAL AND 32 OTHER STATES 

Six Portuguese youth are suing 33 European countries for allegedly failing to avert catastrophic climate change that they say now threatens their right to life. 

The case — among the first to be heard at the European Court of Human Rights — does not ask for financial compensation, but for governments to cut emissions more drastically. The case was heard in Strasbourg in September 2023. A ruling is expected in the first half of 2024.

LUCIANO LLIUYA V. RWE AG (OTC:)

Peruvian farmer Saul Luciano Lliuya is suing German energy utility RWE for about $20,000. He says the company’s emissions have contributed to the melting of Andean glaciers, swelling a lake above his hometown to dangerous levels. 

“It’s a nominal amount, but a significant precedent,” said Joe Snape, an associate at law firm Leigh Day. 

The argument rests on attribution science — can the plaintiff prove the company’s emissions are responsible for worsening climate change, and to what extent? 

Following a May 2022 expedition to Peru to gather evidence, the case will be heard early next year in Hamm, Germany.

PEOPLE OF THE STATE OF CALIFORNIA V. BIG OIL 

In September, the U.S. state of California launched a lawsuit against oil companies Exxon Mobil (NYSE:), Shell, ConocoPhillips (NYSE:), BP (NYSE:) and Chevron (NYSE:).

The suit accuses the companies of deceiving the public by downplaying fossil fuel risks and argues they are responsible for tens of billions of dollars in climate-related damage.

The lawsuit is seeking a compensation fund to pay for future climate-related damages in the state. 

Ambitious in scope, the case is “an amalgamation of strategies,” Setzer said. “It’s not just a compensation case, but also a deception case, which makes it stronger.”