ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS

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ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE
RISE OF CLIMATE
LITIGATION AND
THE CHALLENGES
FOR BUSINESS

             JULY 2021
ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE RISE OF CLIMATE
                                                 LITIGATION AND THE CHALLENGES
                                                 FOR BUSINESS
                                                 Activist shareholders and NGOs targeting governments and
                                                 businesses in relation to climate change are increasingly turning
                                                 to litigation.
                                                 In a recent landmark judgment, the              risk proactively and appropriately might
                                                 District Court of The Hague ordered Royal       substantially harm shareholder value,”
                                                 Dutch Shell (RDS) to reduce its CO2             he adds.
                                                 emissions by 45% by 2030, as compared
                                                 with 2019 levels. The ruling sets a             Shareholder activism in this area has
                                                 precedent for other companies that could        taken many forms – from proposing or
                                                 face similar lawsuits. The case was             supporting emission reduction targets at
                                                 brought by the Dutch branch of Friends          a company's AGM to pursuing litigation,
                                                 of the Earth (Milieudefensie), a number of      often based on variants of established
                                                 other NGOs, and over 17,000 individual          legal theories. For instance, around the
                                                 claimants (see our briefing). This is the       world shareholders have brought cases
                                                 first time that any court has ordered a         arguing that companies are failing to
                                                 company to reduce its CO2 emissions,            analyse and disclose properly the risks
                                                 and the judgment may have significant           climate change poses to their business;
                                                 consequences for other companies with           or that directors are in breach of their
                                                 a link to the Netherlands who have              fiduciary duties by not taking sufficient
                                                 significant CO2 emissions.                      account of climate change risks in their
                                                                                                 decision-making. This is in addition to
                                                 Clifford Chance Counsel, Juliette Luycks,       litigation brought by public bodies and/or
                                                 who is based in Amsterdam says: "The            NGOs seeking to establish corporate
                                                 success of Milieudefensie will increase the     liability for harm caused by emissions.
                                                 likelihood of similar proceedings being
                                                 brought against other large emitters of         The role of NGOs and
                                                 CO2, especially if they are headquartered
                                                                                                 National Contact Points
                                                 in the Netherlands. We may also see
                                                 attempts to bring similar cases against         These actions are often led or supported
                                                 non-Dutch headquartered companies,              by NGOs, for whom litigation is
                                                 arguing that the Dutch Courts have              increasingly becoming an important
                                                 jurisdiction based on other connections of      weapon in their arsenal. NGOs are
                                                 the company or case to the jurisdiction."       supporting claims by alleged victims of
                                                                                                 climate change against businesses, and
                                                                                                 bringing complaints before the
                                                 A growing risk for                              Organisation of Economic Co-operation
                                                 businesses                                      and Development (OECD) National
                                                 The rise in climate change litigation and       Contact Points (NCPs) for breach of the
                                                 shareholder activism is a growing risk for      OECD Guidelines for multinational
                                                 businesses across all sectors; it is no         enterprises. NCPs provide a mediation
                                                 longer confined to the carbon majors.           and conciliation platform for resolving
                                                 "This is due, in part, to sophisticated         practical issues that may arise with the
                                                 litigation-focused NGOs using litigation as     implementation of the Guidelines. “This
                                                 a campaigning tool, and a growing               process does not lead to binding
                                                 recognition of the power of reputational        judgments, but can generate a good deal
                                                 risk to influence corporate behaviour,”         of bad publicity. It's also attractive
                                                 says Roger Leese, a London-based                because it's cheap,” says Leese.
                                                 Partner in Clifford Chance’s Litigation &
                                                 Dispute Resolution Group, and co-head           Following the devastating bushfires in
                                                 of the firm’s business and human rights         Australia (discussed below), in January
                                                 group. “Tackling climate change is now          2020 victims (supported by Friends of the
                                                 very much on the boardroom agenda, as           Earth Australia) filed an NCP complaint
                                                 is a recognition that failing to address this   against Australia New Zealand Bank

2   CLIFFORD CHANCE
    ESG TRENDS: THE RISE OF CLIMATE LITIGATION
    AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
(ANZ) at the Australian NCP. The                 and once circumstances allow, the court
complaint alleges that ANZ, Australia's          will travel to Huaraz to gather evidence;
largest financier of fossil fuel industries,     the first time that a German civil court will
has failed to adhere meaningfully to the         conduct an on-site visit on another
Paris Agreement reduction targets across         continent to assess climate damage
its lending portfolio, or to disclose the full   allegedly caused by a major
extent of its emissions, in breach of the        European corporation.
OECD Guidelines. This follows a similar
complaint brought by Greenpeace and              “Climate change disputes are being used
other NGOs against ING in 2017-2019              as a policy-making tool. NGOs are
concerning its involvement in fossil fuels.      supporting and financing cases with the
The ING complaint resulted in an                 explicit aim of influencing corporate
undertaking by ING to bring its loan             behaviour and strategies. So, the goal is
portfolio in line with the Paris Agreement,      not to obtain a favourable decision and to
including an agreement to exit from              be paid: it is rather about driving the
thermal coal by 2025. Discussions                public debate forward and raising public
continue with ANZ.                               awareness for this cause. Mr Lluiya’s
                                                 case, for example, is largely driven by
Growing numbers                                  NGOs – the actual compensation claimed
                                                 is only a few thousand Euros. The
of claims against                                litigation costs, however, are assumed to
companies globally                               be in the millions,” says Keller.
There are currently hundreds of cases
worldwide, and some are expected to              Challenges to
shape the development of the law and
                                                 governments
the debate on climate change more
broadly. A recent report produced by             Governments are also increasingly finding
Columbia Law School and the United               themselves in the cross-hairs where
Nations Environment Programme found              climate change issues are concerned.
that as of June 2021 there were over             Cases have been brought across the
2,000 climate change related cases in            globe from the US to Australia, with
41 countries.                                    Belgium and Poland most recently joining
                                                 the ranks along with countries such as
Amongst these is the case of Saúl                France, Germany, Ireland, Italy and
Luciano Lluiya, a Peruvian farmer who            Norway. These claims, if successful, are
brought a claim against the German               paving the way for more sweeping and
energy company RWE AG in Germany.                stringent obligations on businesses, both
Mr Lluiya owns some land in a valley in          through the consequential passing of
the Peruvian Andes, located just below a         national laws and regulations, and the
melting glacier. He argues that RWE              resultant development of judicial
should contribute to the cost of protective      precedent and case theory.
measures necessary to safeguard his
property against flooding, commensurate          Germany
with RWE’s proportionate share of global         Recently a group of German citizens,
greenhouse gas emissions. “The                   activists from the global movement
interesting question at stake is one of          "Fridays for Future" and islanders in fear
causation,” says Moritz Keller, a Frankfurt-     of the direct effects of climate change
based partner in Clifford Chance's               through rising sea levels, as well as
Litigation & Dispute Resolution Group. “Is       Bangladeshi and Nepalese citizens,
it possible to prove that RWE’s emissions        challenged the German Federal Climate
in Germany have caused the glacier in            Change Act (Bundes-Klimaschutzgesetz -
Peru – that is some 10,000 kilometres            Climate Change Act). Backed by NGOs
away – to melt?”                                 including Greenpeace and Germanwatch,
                                                 the plaintiffs invoked the "Right to a
In November 2017, the Higher Regional            Future", arguing that Germany's climate
Court of Hamm determined that Mr Lluiya          change targets to reduce CO2 emissions
has a prima facie case against RWE,              by 55% by 2030, are too low.
ordering that the claim progress to the
evidentiary stage. As part of this process,

                                                                                                                           CLIFFORD CHANCE    3
                                                                                                 ESG TRENDS: THE RISE OF CLIMATE LITIGATION
                                                                                                        AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
In another landmark ruling (published on        approvals relating to coal mining projects
                                                 29 April 2021), the Federal Constitutional      which could make a reasonably
                                                 Court held that provisions of the Climate       foreseeable contribution to climate
                                                 Change Act governing national climate           change under the Environment Protection
                                                 change targets and annual emission              and Biodiversity Conservation Act 1999
                                                 budgets until 2030 are incompatible with        (Cth). In this case, the Vickery Coal
                                                 fundamental constitutional rights, since        Project (owned by Whitehaven Coal) was
                                                 they lack sufficient specifications for         expected to extract 33 MT of coal, with
                                                 further emission reductions from 2031           consequent emissions of 100 Mt of CO2.
                                                 onwards. The Court found that reduction         Detailed expert evidence relating to the
                                                 targets provided for in the Climate             cause and impacts of climate change
                                                 Change Act are imbalanced, as they shift        was considered by the Court, with
                                                 major reduction burdens to the future,          Bromberg J noting that "[i]t is not
                                                 which could result in a considerable            disputed that these [climate change
                                                 limitation on the freedom of coming             induced] events will have impacts on the
                                                 generations. In response, the German            Australian economy, Australia’s natural
                                                 cabinet has approved a reform of the            and managed terrestrial and marine
                                                 Climate Change Act, setting a new target        ecosystems, and on the health and
                                                 of a 65% cut to CO2 emissions and               wellbeing of individuals, communities and
                                                 describing it as a “fair offer to the           society". His Honour was satisfied that
                                                 younger generation.”                            injury-inducing events such as heatwaves,
                                                                                                 bushfires and other flow-on effects
                                                 Thomas Voland, a Clifford Chance Partner        "expose each of the Children to a real risk
                                                 based in Düsseldorf says: "The ruling           of harm from extreme weather events
                                                 might necessitate that business sectors         brought about by climate change."
                                                 adapt their processes to these stricter
                                                 requirements and accelerate the transition      This ground-breaking decision follows a
                                                 process. In addition to the financial           number of recent climate change-related
                                                 consequences, the ruling will have far-         cases in Australia, including the class
                                                 reaching legal implications. It confirms        action filed by Melbourne law student
                                                 that climate protection and mitigation of       Kathleen O'Donnell in O’Donnell v
                                                 the long-term effects of climate change         Commonwealth in July 2020. In a
                                                 are of high constitutional importance. This     Statement of Claim filed on 23 December
                                                 finding is expected to further increase the     2020, the applicant alleges that the
                                                 risk of climate change-related lawsuits         Commonwealth Government failed in its
                                                 against companies."                             duty to disclose climate change impacts
                                                                                                 on the value of government bonds. The
                                                 Australia                                       case promises to further clarify how
                                                                                                 climate risk should be managed and
                                                 The Australian Government and Federal
                                                                                                 disclosed by government entities looking
                                                 Minister for the Environment are facing
                                                                                                 to raise funds in public markets.
                                                 increased pressure to take further action
                                                 on climate change following the
                                                                                                 Amanda Murphy, a Counsel in Clifford
                                                 devastating bushfire emergency during
                                                                                                 Chance's Perth office, who specialises in
                                                 the summer of 2019-2020, in which 33
                                                                                                 international law, including climate change
                                                 people were killed, 3,094 homes
                                                                                                 law, says: "The decision in the Sharma
                                                 destroyed, a total of 17 million hectares of
                                                                                                 Case has established a novel duty of care
                                                 land was burned and over a billion
                                                                                                 in Australian law, while also affirming the
                                                 animals were lost. Most recently, on 27
                                                                                                 causes and probable generational harm
                                                 May 2021, the Federal Court of Australia
                                                                                                 which will be caused by climate change.
                                                 issued a landmark judgment in Sharma
                                                                                                 With the scars of the devastating bushfire
                                                 (by her litigation representative) v Minister
                                                                                                 season still raw in the Australian psyche,
                                                 for the Environment [2021] FCA 560. This
                                                                                                 this decision will no doubt open the door
                                                 Judgment recognises, for the first time,
                                                                                                 for similar claims based on breach of this
                                                 that the Minister for the Environment
                                                                                                 novel duty of care against both
                                                 owes a duty of care to protect Australian
                                                                                                 Government and private entities."
                                                 children from the harmful impacts of
                                                 climate change when considering

4   CLIFFORD CHANCE
    ESG TRENDS: THE RISE OF CLIMATE LITIGATION
    AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
France                                         On 1 April 2021, another administrative
                                               court partially admitted a request from six
Both governments and corporates have
                                               environmental NGOs seeking to revoke
been targeted in several landmark cases
                                               Total Refining France's operating permit
this year before the administrative and
                                               to continue to operate a refinery in South-
civil courts in France.
                                               Eastern France. Total intended to
On 1 July this year, the Conseil d'Etat (the   transform the refinery in question from
highest French administrative court)           crude oil to biofuels. Whilst the NGOs did
ordered the French government to take          not succeed in invalidating the permit, the
additional measures by 31 March 2022 to        court did order Total to review its impact
reduce greenhouse gas emissions by             study on the use of palm oil imported
40% by 2030. This case was originally          from Asia. This decision demonstrates the
commenced by the city of Grande-Synthe         French court's sensitivity to environmental
in northern France, and environmental          issues and its increasing tendency to
groups including Greenpeace, Oxfam,            require corporates to undertake more
Notre Affaire A Tous and the Nicolas           impact or risk studies.
Hulot Foundation. This direct action
                                               In this respect, NGOs tend to rely
resulted in an historical decision last
                                               increasingly on the Loi de vigilance,
November, by which the administrative
                                               enacted in 2017, to file claims against
courts gave the French government three
                                               corporates regarding an insufficient
months to prove that current greenhouse
                                               awareness and lack of effective measures
gas emissions targets for 2030 could be
                                               to mitigate social and environmental risks.
met without additional measures. Having
                                               An unsolved debate on jurisdiction is
disclosed this additional information, the
                                               currently ongoing as NGOs tend to seize
court rejected the Government's claims
                                               civil courts while corporates claim
that no further measures were required,
                                               commercial courts should have
resulting in the injunction ordered on
                                               jurisdiction. In this respect, on 11
1 July.
                                               February 2021, the Nanterre Civil Court
Meanwhile, in February 2021, a Paris           ruled that it did have jurisdiction to hear
administrative court found the French          the complaint filed by NGOs and local
state guilty of failing to address climate     authorities in climate litigation cases. This
change, and for not adhering to its            decision came as a surprise, as it
promises to tackle CO2 emissions.              contradicts the decision of the Court of
Dubbed the "case of the century", this         Appeal of 10 December 2020, which
case was brought by environmental              confirmed the lack of jurisdiction of civil
groups, including Greenpeace and               courts in favour of commercial courts to
Oxfam, following a petition signed by 2.3      rule on the compliance of vigilance plans.
million people. Whilst the case only           The judge ruled that even if a dispute
resulted in an award of one euro to each       "relates to commercial companies" once
NGO (for non-material harm and prejudice       the vigilance plan and the internal
moral), resolving the question of              management of the company are directly
pecuniary compensation in such                 linked, it does not prevent civil courts
instances, the court did recognise the         from having jurisdiction in cases brought
concept of "ecological damage" and             by non-business claimants. The oil
established a duty on the State to its         company involved in the Nanterre case
citizens to comply with the Paris              announced that it will appeal the decision,
Agreement. The court has not yet ruled         so a new decision from the Court of
on the measures needed to stop the             Appeal of Versailles is expected.
future aggravation of damage and ensure
that the State complies with its               The Netherlands
international engagements, but did order       Perhaps the case that started it all took
the State to undertake further                 place in the Netherlands. Urgenda, a
investigative measures over a two-month        foundation that wants to achieve, in its
period. Another hearing should be              own words, “a sustainable Netherlands,”
scheduled in the near future to rule on        took the Dutch state to court in 2013
such measures.                                 over its alleged failure to take effective

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                                                                                               ESG TRENDS: THE RISE OF CLIMATE LITIGATION
                                                                                                      AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
action on climate change. The case made        amend their complaint and, in May 2021,
                                                 headlines globally in 2015 when the court      the district court judge ordered a
                                                 found in favour of Urgenda, ruling that the    settlement conference between the
                                                 government must cut greenhouse gas             parties. Thus the case continues.
                                                 emissions by at least 25% by the end of
                                                 2020 (in comparison with 1990 levels).         Over twenty state and local governments
                                                 The case came to an end with a final           have pursued claims against energy
                                                 judgment of the Supreme Court in late          companies in state courts under public
                                                 2019 – again finding in favour of Urgenda.     nuisance laws for their contributions to
                                                 Urgenda is now seeking a court order           climate change, but face roadblocks over
                                                 that the Dutch State pay penalties for         questions of jurisdiction, in particular
                                                 each day that it fails to take steps           whether the defendants can successfully
                                                 towards the reduction in greenhouse            remove those cases to federal court and
                                                 gas emissions.                                 arguments that the claims are pre-
                                                                                                empted by federal law. The Supreme
                                                 Arguably, a line can be drawn between          Court recently sided with the energy
                                                 this 2019 decision and the recent              companies in one such case, sending the
                                                 judgment against RDS by the District           case back to the lower court to consider
                                                 Court of The Hague in May 2021. In the         the jurisdictional question further, but the
                                                 Urgenda decision the court applied             ruling was one of technical procedure and
                                                 articles 2 and 8 of the European               did not address the substance of any
                                                 Convention on Human Rights (ECHR)              claims. As this history shows, these
                                                 directly, in the RDS-case these                cases often take years to resolve and
                                                 fundamental rights were part of a wider        involve multiple levels of appeal in both
                                                 mix of relevant rules and norms which the      the federal and state courts.
                                                 court applied in determining the standard
                                                 of care owed by a company towards the          Outside of the courts, the US regulatory
                                                 inhabitants of The Netherlands in respect      landscape is only becoming more
                                                 of greenhouse gas emissions.                   complex. At the federal level, President
                                                                                                Biden has indicated that the federal
                                                 “The outcome in Urgenda was surprising         government will increase its regulatory
                                                 to many at the time – courts rarely dare       activity following a "whole of government"
                                                 to oblige States to take action. In many       approach, most recently with his 20 May
                                                 ways, this was the beginning of the            2021 executive order directing the
                                                 global wave of climate change cases,"          executive branch to develop a strategy
                                                 says Luycks.                                   regarding the risks that climate change
                                                                                                poses to the US financial system.
                                                 The US                                         Additionally, the Chairman of the
                                                                                                Securities and Exchange Commission has
                                                 In the US, although plaintiffs have
                                                                                                repeatedly stated that public companies
                                                 imposed pressure on companies through
                                                                                                could soon be expected to disclose
                                                 litigation, claims for climate-related harms
                                                                                                climate-related risks in their business.
                                                 have to-date met with limited success in
                                                                                                Where companies have already made
                                                 the US federal courts. In one case,
                                                                                                such disclosures, the accuracy of the
                                                 Juliana v. United States, twenty-one
                                                                                                disclosures has also exposed them to
                                                 young people sued the US government,
                                                                                                regulatory enforcement action and
                                                 alleging that its failure to act on climate
                                                                                                shareholder litigation, as has been the
                                                 change violated their rights under the US
                                                                                                case with lawsuits brought against Exxon
                                                 Constitution and asking the courts to
                                                                                                by the New York State Attorney General's
                                                 require the government to develop a
                                                                                                Office, which Exxon defended
                                                 climate action plan. In January 2020, the
                                                                                                successfully, and by shareholders in
                                                 US Court of Appeals for the Ninth Circuit
                                                                                                federal district court in Texas, which
                                                 dismissed the case for lack of standing.
                                                                                                Exxon continues to defend.
                                                 The court reasoned that no court order
                                                 could redress the plaintiffs' injuries
                                                                                                At the state level, the direction is mixed,
                                                 because it is beyond the courts' power to
                                                                                                following the political leanings of the
                                                 supervise the political branches in
                                                                                                individual states. For example,
                                                 developing a climate plan. The Ninth
                                                                                                Washington State enacted its Climate
                                                 Circuit refused to rehear the case en
                                                                                                Commitment Act, on 17 May 2021, which
                                                 banc. However, plaintiffs filed a motion to

6   CLIFFORD CHANCE
    ESG TRENDS: THE RISE OF CLIMATE LITIGATION
    AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
will create the country's most aggressive      agreements (namely, the 1992 United
cap-and-trade system and will require          Nations Framework Convention on
decreasing emissions over the coming           Climate Change and the 2015 Paris
years. In contrast, Texas's Senate Bill        Agreement), European conventions and
13 would require state entities to divest      regulations (such as Article 2 and 8 of the
from companies that boycott high-              ECHR, Article 191 of the Treaty on the
emissions companies.                           Functioning of the European Union and
                                               Regulation No. 2018/1999) and Italian
Clifford Chance Partner Steve                  provisions (Articles 2 and 32 of the Italian
Nickelsburg, who is based in Washington,       Constitution – solidarity principle and right
D.C., says: "across the board, companies       to health). The claimants argue that the
doing business in the United States face       Italian Government is in violation of the
a changing landscape for legal risk            general duty of neminem laedere (or do
related to climate change. Especially as       harm to no one, Article 2043 of the Italian
federal agencies begin to implement the        Civil Code) and of the duty to take care of
Biden Administration's executive orders,       goods (Article 2050 of the Italian Civil
companies should consider their                Code) to which the Government is the
strategies to address anticipated              sole custodian (i.e. the environment).
regulatory expectations around climate
change risks. In addition, businesses with     It is expected that the case will
cross-border operations in particular will     progress to an initial procedural hearing in
face increasingly complex requirements,        approximately three months, but it is
depending on the level of coordination         unlikely that the matter will come to trial
between the United States and, for             before the end of 2021. The first instance
example, the European Union.                   decision may be expected in
Companies should prepare themselves            approximately two years' time, depending
with a comprehensive strategy                  on how long the evidentiary phase
for adapting."                                 will take.

Italy                                          A ruling in favour of the claimants would
                                               likely lead to the Italian Government
The Italian courts are about to hear Italy's
                                               introducing new legislation setting
first climate-related case.
                                               concrete steps to meet its 2015 Paris
                                               Agreement obligations. Furthermore, as
On 5 June 2021, more than 200
                                               has happened in other jurisdictions such
claimants, including 162 adults, 17
                                               as the Netherlands, a successful outcome
minors (represented in court by their
                                               on the part of the claimants may also
parents) and 24 NGOs, filed a lawsuit
                                               encourage environmental activists to
against the Italian State, called "The Last
                                               widen their attention from the
Judgement", along the same lines as the
                                               Government to include corporations
Dutch Urgenda case and French Affaire
                                               whose business involves heavy emissions
du Siècle. The aim of the lawsuit, brought
                                               of greenhouse gasses.
before the Court of Rome, is to sue the
Italian State for "climate inaction" – an
insufficient commitment to promote             Mounting commercial
adequate greenhouse gas emission               pressure
reduction policies; seeking a ruling           In addition to litigious and regulatory
ordering the Italian State to achieve a        pressure, companies are also facing
reduction of 92% in greenhouse gas             mounting commercial pressure to
emissions by 2030, in order to meet the        address their exposure to climate change
long-term temperature goal of the Paris        risks. On the same day as the RDS
Agreement (aiming at limiting global           decision (26 May 2021), significant
warming to 1.5°C).                             climate change-related votes took place
                                               at the AGMs of ExxonMobil and Chevron.
The claimants allege that the action taken     At ExxonMobil, a small group of investors
by the Italian Government so far in this       representing only 0.002% of shares won
area is undoubtedly insufficient and           seats on the twelve-member board, after
results in the violation of numerous           arguing that the company's focus on
fundamental rights recognised by the           fossil fuels created an "existential risk" –
Italian State, deriving from international     the first time in the company's history that

                                                                                                                         CLIFFORD CHANCE    7
                                                                                               ESG TRENDS: THE RISE OF CLIMATE LITIGATION
                                                                                                      AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
it has faced a contested shareholder vote   What's next?
                                                 of this nature. Meanwhile, over at
                                                                                             Climate change litigation is here to stay.
                                                 Chevron, shareholders voted for a
                                                                                             Growing climate awareness, increased
                                                 resolution calling on the company to
                                                                                             pressure on Governments to adopt
                                                 reduce substantially its Scope
                                                                                             progressive legislative and regulatory
                                                 3 emissions.
                                                                                             action to try to limit global warming to
                                                                                             "well below" two degrees (if not 1.5
                                                 Such resolutions have become a
                                                                                             degrees), and to take actual concrete
                                                 common feature in the energy sector.
                                                                                             steps now to implement these targets in
                                                 Banks are also being targeted by
                                                                                             the short to medium term, combined with
                                                 activists, with resolutions being put
                                                                                             a judicial willingness to grapple with these
                                                 forward designed to phase out financing
                                                                                             thorny issues as case theories start to
                                                 for carbon-intensive industries. Pushing
                                                                                             crystallise and a line of (global) precedent
                                                 for these resolutions has become a key
                                                                                             is formed, make this an efficient tool for
                                                 tactic of activists such as ShareAction
                                                                                             activists to apply pressure on businesses.
                                                 and has proven successful. As the Say
                                                 on Climate campaign continues to gather
                                                                                             "We see increasing shareholder activism
                                                 momentum, similar actions are imminently
                                                                                             and more and more litigation activity
                                                 expected at hundreds of other
                                                                                             relating to ESG. And ESG requirements
                                                 companies, assuming they fail voluntarily
                                                                                             are triggering a fundamental change of
                                                 to agree to develop comprehensive
                                                                                             business case across many sectors – not
                                                 climate plans, and to put them to a
                                                                                             just energy" says Leese. “We are advising
                                                 shareholder vote themselves.
                                                                                             our clients to monitor this changing
                                                                                             landscape and to work on "future
                                                                                             proofing" their business to take account
                                                                                             of what's coming down the track. ESG
                                                                                             is a boardroom topic and rightly so."

8   CLIFFORD CHANCE
    ESG TRENDS: THE RISE OF CLIMATE LITIGATION
    AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
CONTACTS

Roger Leese                   Carla Lewis             Juliette Luycks
Partner                       Senior Associate        Counsel
London                        London                  Amsterdam
T: +44 207006 8710            T: +44 207006 4323      T: +31 20 711 9118
E: roger.leese@		             E: carla.lewis@         E: juliette.luycks@
   cliffordchance.com            cliffordchance.com       cliffordchance.com

Thomas Voland                 Amanda Murphy           Steve Nickelsburg
Partner                       Counsel                 Partner
Düsseldorf                    Perth                   Washington
T: +49 211 4355 5642          T: +61 8 9262 5567      T: +1 202 912 5108
E: thomas.voland@		           E: amanda.murphy@		     E: steve.nickelsburg@
   cliffordchance.com            cliffordchance.com      cliffordchance.com

Daan Lunsingh Scheurleer      Moritz Keller           Alice Dunoyer de Segonzac
Partner                       Partner                 Avocat
Amsterdam                     Frankfurt               Paris
T: +31 20 711 9047            T: +49 69 7199 1460     T: +33 1 4405 5262
E: daan.lunsinghscheurleer@   E: mortiz.keller@		     E: alice.dunoyerdesegonzac@
   cliffordchance.com            cliffordchance.com       cliffordchance.com

Charles-Henri Boeringer       Carolina Piovano
Partner                       Senior Associate
Paris                         Milan
T: +33 1 4405 2464            T: +39 02 8063 4277
E: charles-henri.boeringer@   E: carolina.piovano@
   cliffordchance.com            cliffordchance.com

                                                                                                              CLIFFORD CHANCE    9
                                                                                    ESG TRENDS: THE RISE OF CLIMATE LITIGATION
                                                                                           AND THE CHALLENGES FOR BUSINESS
ESG TRENDS: THE RISE OF CLIMATE LITIGATION AND THE CHALLENGES FOR BUSINESS
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