One of the headline news items coming out of COP27 in Sharm El-Sheik, Egypt, in November of 2022, was an agreement to set up a fund for payments to developing countries that suffer loss and damage from climate-driven events like flooding, droughts and wildfires. It remains to be seen how that agreement will be implemented, and how much relief is actually provided to countries that have been harmed. In the meantime, private environmental liability actions are another means for seeking redress.Climate Liability BMW

In 2015, the residents of Chingola, Zambia, brought suit in England against Vedanta Resources Plc (Vedanta), a UK company, and Konkola Copper Mines Plc (KCM), which is Vedanta’s subsidiary in Zambia. The residents claimed that waste from KCM’s copper mine polluted local waterways, causing personal injury to residents, as well as property damage and loss of income. After years of jurisdictional challenges, in 2019 the UK Supreme Court unanimously held that Vedanta could be sued in England. It remains to be seen whether the case will be tried on its merits or settled.

In 2021, an environmental group, Deutsche Umwelthilfe (Environmental Action Germany), brought suit against BMW, seeking to force the car maker to stop selling carbon-emitting vehicles by 2030. The plaintiffs argued that continuing to make vehicles that produce greenhouse gas emissions infringe on their right to be protected from climate change, which is a right protected by a 2021 German law. The court dismissed the claim in February of 2023, but left open the possibility that it could be upheld at a later date. Meanwhile, the plaintiffs announced that they would appeal the ruling.

Also in 2021, the environmental group Greenpeace brought a court action in Germany against Volkswagen, also seeking to force the company to cease selling combustion engine vehicles by 2030. The case was dismissed in February of 2023, but Greenpeace has said that it plans further legal action.Climate Liability Shell

In 2023, ClientEarth brought suit against Shell in England, alleging that Shell’s board members are personally liable for failing to manage climate hazards. Shell was also sued in London by Nigerian residents seeking compensation for environmental damages caused by oil spills that contaminated drinking water, and negatively impacted air quality, farm land and fishing stocks.

Residents of the Indonesian island of Pulau Pari filed suit in Switzerland against Holcim, a cement manufacturer, seeking compensation for climate damage. The Pulau Pari residents are backed by Swiss Church Aid (HEKS), an NGO that advocates for climate justice. The complaint demands Holcim to pay compensation for the damage that has already been caused, and to finance flood control measures. The plaintiffs also demand that the Swiss group rapidly reduce its carbon dioxide emissions.

Also in 2023, in France, BNP Paribas was sued by climate and human rights activists Oxfam, Friends of the Earth and Notre Affaire à Tous, under a 2017 French law. The suit alleges that, by making loans to oil and gas companies, BNP Paribas breached its duty to ensure that its activities do not harm the environment.Liability for Climate Change

Though the ultimate outcome of these cases is not yet known, they suggest a future in which individuals, communities, and perhaps countries, with or without the backing of NGOs, will continue to challenge the actions of companies who have allegedly caused (and benefited from) negative environmental externalities. We think this is a trend worth watching.

It is also worth it for companies to take action now to assess their own environmental liability exposure, insurance, and possible defenses. Beyond that, it is time for companies to plan for a future in which their actions will not give rise to environmental liability claims. Contact Clear Strategy today to talk about getting started.

© 2023 Clear Strategy Co.

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