Irwin Mitchell Chair Discussion On How To Mitigate Climate Change Risks

UK businesses should monitor and learn the lessons from the US and other countries to understand and mitigate the risks associated with the growing tide of climate change litigation.

This recommendation was a key finding from a recent panel session held as part of The Lawyer magazine’s conference on managing risk and litigation on 23 November 2021.

Irwin Mitchell partners Hannah Clipston and Georgie Collins chaired and participated in the panel discussion. They were joined by Kate Wilford from Anglo American, Grant McCaig from Phoenix Group and Sapan Gupta ArcelorMittal Group.

Georgie Collins, partner and Head of Irwin Mitchell’s US desk, said:

Expert Opinion

“Climate change litigation is increasing. Globally, there are currently about 2,000 cases of climate change litigation and over half of these have been filed since 2015.

“About 1,700 of these cases have been brought in the US since 1986 and, as a result, it’s important to consider the types of climate change litigation being brought in the US and the trends emerging which could result in similar cases being brought in the UK.

“The number of strategic cases is dramatically on the rise and of approximately 40 ongoing climate change lawsuits against carbon-intensive companies worldwide, 33 are in US courts.”
Georgie Collins - Partner

The panel discussed the trends emerging in the US as well as some recent climate change litigation cases in Europe.

These included a case where the District Court in the Hague has effectively set Shell’s climate strategy and agenda for it.  In May 2021, the Court ruled that in accordance with its obligations under the Dutch Civil Code and the ECHR Shell owed a duty of care and must cut its CO2 emissions by 45% compared to 2019 levels.

Drawing on this case as precedent, Greenpeace has very recently brought a claim against Volkswagen in Germany accusing Volkswagen of failing to decarbonise the company in line with the 1.5C goal set out in the Paris Agreement.  

The panel also highlighted another case in Germany where a number of individuals (Neubauer et al) challenged Germany's Federal Climate Protection Act on the basis that the targets set under that act were insufficient to meet those set out in the Paris Agreement and were therefore in violation of those individuals’ human rights under the German constitution. The Federal Constitutional Court upheld this argument, struck down a number of parts of the Act, and compelled the German government to make a new plan by 2022 which would reduce emissions by 2031.

The panel’s tips to mitigate risk were:

• Monitor and learn from the climate change litigation in the US and other jurisdictions. Consider the types of cases emerging there and think about how you can minimise the risk of your business being subject to similar action brought in the UK. You can use the Sabin Centre for Climate Change Law’s database to keep up to speed with the current cases on climate change.
• Plan and prepare for the upcoming disclosure obligations. From 6 April 2022, over 1,300 of the largest UK-registered companies and financial institutions will have to disclose climate-related financial information on a mandatory basis.
• As a lawyer or in house lawyer, embed yourself within your business, to understand what the business is doing, and the direction it is going in. This enables you to work proactively to spot, stress test, educate and thereby mitigate risk related to climate issues, rather than reactively dealing with issues after they arise. In particular consider carrying out due diligence on your supply chain, investments and partnerships to check alignment with business strategy and approach to climate change. Campaigners and interested parties are watching and reporting on claims in relation to climate change, and showing an increased passion and willingness to lobby or litigate.
• Increase the amount of people looking at climate issues within your teams and share insights and collaborate with other businesses. Climate change issues and risks are wide reaching and evolving quickly and there is no right answer or one size fits all. We can all learn from each other.