UK corporations face ongoing threats from climate-related lawsuits, according to the Grantham study

In the year 2023, the landscape of climate litigation saw a significant shift, with various jurisdictions grappling with the mounting risks associated with the issue. According to the Grantham Research Institute's latest annual report, published in 2024, climate-related litigation emerged as a significant risk for businesses across numerous industries.

The report highlighted a slowdown in the rate of growth in the number of new cases, with 230 new climate-related cases filed globally, a decrease from previous years. Despite this decrease, the most active jurisdictions after the US, in terms of new cases, were the UK, Brazil, Germany, and Australia.

Australia, however, saw slower new claims activity than some other jurisdictions, but the report does not provide any new information about the number of cases recorded in Australia or any changes in the jurisdictions with the highest aggregate numbers of recorded cases.

Notable cases in 2023 included the landmark climate-related lawsuit against German energy company RWE, where a court recognized for the first time that large emitters like RWE can be held civilly liable for their contribution to global climate change. Despite the specific case being dismissed for lack of immediate harm, it marked a significant step forward in climate litigation.

Swiss cement company Holcim also faced a climate lawsuit filed in Switzerland, targeting its significant CO2 emissions. The report does not mention any new court decisions that have gone against climate activists, nor does it provide any information about their potential impact on new claims.

The report also shed light on the global rise in greenwashing or 'climate washing' litigation, with over 140 greenwashing cases brought globally, 47 of which were filed in 2023. Over 70% of these greenwashing claims are reportedly successful, emphasizing the importance of businesses reviewing their policies and processes to ensure appropriate claims and robust evidence.

The report underscores the fact that businesses from various sectors, including aviation, food and beverage industry, e-commerce, financial services, can be exposed to climate-related litigation. Michael Fenn, a litigation expert at Pinsent Masons, stresses the importance of organizations obtaining the right advice about the development and practical implementation of their ESG strategies.

Emilie Jones, another litigation expert at Pinsent Masons, emphasized that UK businesses should be aware of their potential heightened exposure to these claims. She comments that the failure of derivative claims for breach of directors' duties in recent UK cases may have caused claimant groups to reconsider the viability of such claims.

Despite the slowdown in the rate of growth, the report reaffirms the need for organizations to stay vigilant and proactive in addressing climate-related risks, including litigation. As the world continues to grapple with the consequences of climate change, the role of climate litigation in driving change and holding organizations accountable will undoubtedly remain a key focus.