By Aliénor Legendre, Research Associate at MainStreet Partners
As the urgency to address climate change intensifies, the number of climate-related lawsuits is rapidly increasing. From holding governments accountable to exposing corporate greenwashing, climate litigation has seen a sharp rise.
Between 2017 and 2022, the number of cases more than doubled, surging from 884 to 2,180, and this momentum carried into 20231, with over 230 new cases filed that year alone2. While most lawsuits remain concentrated in the US as well as the UK, Germany, Italy, and Sweden, an increasing number of cases are emerging from developing countries, which accounted for 17% of global climate cases by 2022. This shift reflects the expanding global focus on climate accountability.
This should be of keen interest to investors whose investments could be impacted by the legal ramifications, as well as those looking to carry out their stewardship due diligence.
MainStreet Partners database shows that companies flagged by our research regarding climate litigation are significantly involved in greenwashing cases. The energy and financial sectors face particularly elevated risks, predominantly in Europe, where litigation and penalties have set important precedents.
With many cases still pending, companies must brace for increased legal scrutiny and potential financial consequences.
Types of climate litigation
According to the United Nations Environment Programme (UNEP), climate litigation can be broadly categorised into six key areas.
These areas represent the different types of legal cases or actions taken by individuals, organisations, or governments in response to climate change:
1. Human Rights-Based Cases: Many cases are built on the argument that climate change and insufficient governmental action violate constitutional rights, such as the right to life, health, and a safe environment. Claimants often invoke international human rights law or constitutional provisions to demand stronger climate action from governments and corporations.
2. Challenges to Domestic Non-Enforcement: Some lawsuits target governments for failing to enforce their own climate commitments and strategies. These cases aim to compel stronger implementation of existing policies to mitigate climate risks.
3. Fossil Fuel litigations: A growing number of lawsuits seek to prevent the extraction and burning of fossil fuels, arguing that such activities contribute to climate change and must be curbed.
4. Greenwashing and Climate Disclosure Disputes: Corporations are increasingly being sued for making false or misleading environmental claims, also known as greenwashing. Claimants
are demanding greater transparency in corporate climate disclosures to ensure accountability.
5. Corporate Liability for Climate Harms Cases: Some cases hold corporations solely responsible for environmental harm. These lawsuits often seek financial compensation or policy changes to prevent further harm.
6. Failure to Adapt Complaints: As climate impacts become more severe, a new wave of cases focuses on the failure of governments or corporations to adapt. These cases argue that insufficient planning for climate-related risks can exacerbate vulnerabilities, leading to harm.
Case Study: ExxonMobil and Climate Litigation – A Growing Accountability Crisis
One company that has increasingly found itself at the centre of climate litigation is ExxonMobil, facing multiple lawsuits that are significantly reshaping the conversation around corporate accountability in environmental issues.
In July 2024, a lawsuit against ExxonMobil, initiated by over two dozen cities and states, was filed. This suit accused the company of misleading the public about the environmental and climate risks of fossil fuels and demands financial penalties, restitution, and a corrective campaign to undo decades of misinformation.
The company responded by suing shareholders, leading to tension with large institutional investors like CalPERS and Norges Bank.
These developments underscore the increasing financial and legal risks for companies. This case could set a powerful precedent for holding oil majors accountable for their role in the climate crisis.
Emerging Trends and Future Expectations
While the number of new climate-related cases continues to rise, the rate of growth is slowing, indicating that future climate litigation may concentrate on strategic, high-impact cases capable of setting legal precedents and driving broader policy change.
Since 2023, there has been a notable increase in international climate cases filed in major courts, such as the European Court of Justice, the International Tribunal for the Law of the Sea, and the Inter-American Court of Human Rights, which are expected to have significant ripple effects on domestic legal systems, influencing future rulings on climate matters.
Companies, particularly in sectors like energy and finance, are facing a surge of litigation related to climate-washing, inadequate transition risk management, and the polluter-pays principle. Claimants won 70% of greenwashing cases in 20232, underscoring the growing legal risks for corporations making misleading environmental claims.
Interestingly, not all climate cases align with the global goal of reducing emissions. Fifty cases2 filed in 2023 challenge climate goals, targeting ESG initiatives, public participation in climate policy, and just transition measures.
The legal landscape surrounding climate change is becoming increasingly complex, with both pro- and anti-climate action litigation in play. It is safe to say that the landscape of climate litigation will continue to expand.
Businesses, especially in high-risk sectors like energy and finance, must prepare for greater scrutiny, while plaintiffs will focus on key strategic cases to drive global climate action. The future of climate litigation is already here—and it is reshaping the way we tackle the climate crisis.
