Net Zero strategy “unlawful”: What’s the future for climate litigation?

Why is the Friends of the Earth/ClientEarth claim of interest?

The cultural shift, in recent years, towards an increasing social and environmental conscience has resulted in a marked increase in climate litigation.

In the Friends of the Earth/ClientEarth case [1], the climate action claimants argued that the Net Zero strategy breached the Climate Change Act 2008 (CCA) because it didn’t spell out how promised emission cuts could be delivered. The High Court agreed. It ordered the government to inform parliament, by April 2023, how specific policies would contribute towards emissions reductions.

The case demonstrates that the CCA has teeth and can be enforced through courts.

This high profile decision also comes at a time of unprecedented global momentum, from regulators, activists, investors and consumers, for driving sustainability and for combatting ‘greenwashing‘.  Consequently, the very clear direction of travel for climate litigation is that the numbers and types of climate-related claims that are likely to be brought, and the types of organisations that are likely to be targeted, are likely to expand.

Businesses should be prepared for the focus of climate litigation to move from predominantly actions against governments, to actions against public and private businesses.

What practical advice arises?

Businesses can take practical steps to minimise the risk of climate-related allegations, and to respond quickly and effectively to climate litigation.

In terms of ‘prevention’, businesses can:

• Be proactive. Tackling the ESG agenda and getting the business’ approach right now can avoid the business being in the firing line later down the line.

• Engender an ESG/sustainability ethos throughout the business, from the top down

• Audit all aspects of the business which have an environmental/climate change impact

• Undertake operational and contract reviews to test for areas of vulnerability to climate litigation

• Consider own/subsidiaries’/investors’/supply chain third parties’ products, processes, policies and, for each:
  • Ask whether energy/emissions/waste be reduced? How?
  • Critically assess what green claims are being made and can they be substantiated
  • Consider whether climate-friendly contract clauses be used in existing or new relationships

• Consider whether language used in corporate statements, policies, promotional material, etc. might amount to legally binding representations or commitments

• Train staff – at all levels, and regularly – on climate litigation-related issues

• Train directors and senior staff on legal duties and policy/procedure-driven strategies and obligations to consider and improve sustainability

• Keep up-to-date, and comply, with legal developments and with legal, regulatory and reporting requirements [2]

• Keep accurate and up-to-date records of all ESG activities, efforts to improve sustainability and statements.

In terms of ‘cure’:

• If/when the threat of any climate litigation does become a reality, a business should seek immediate expert legal advice. Apart from providing advice on merits and strategy, the involvement of a specialist solicitor should make sure that the business’ overall position remains protected, and in particular that legal privilege applies, from the outset of any action or investigation

• Keeping accurate and up-to-date records of all ESG activities, efforts to improve sustainability and disclosures/statements/reports should also help to found a robust response. It can potentially even found an outright defence to climate-related allegations.

Horizon scanning

In terms of what climate litigation and the wider ESG agenda is likely to mean for businesses in the longer term, there is little doubt that investment in green technologies, assets, infrastructure and renewables must increase – at the international, national and corporate level.  Businesses will have to address environmental impact at every stage, from the securing of green finance, through their supply chains, to the impact of goods/services offered to end users, and ultimately in respect of any waste/disposal concerns.  Innovation, as well as embedding in the culture of the business the principles of responsibility and transparency in respect of all-things ESG-related, will be key.

How we can help

As well as helping with specific practical tasks, such as contract reviews and reviewing/improving policies and procedures, Walker Morris can work alongside businesses to keep them updated and advised as to any climate-related legal and regulatory developments that may affect them. Walker Morris can also provide tailored staff training, as part of the business’ sustainability and risk management strategy.

Crucially, Walker Morris can provide urgent and sensitive specialist advice and dispute resolution strategies when it comes to the investigation and potential litigation of any climate-related claims.

Please contact Nick McQueen for further information.

[1] [2022] EWHC 1841 (Admin)

[2] See Walker Morris’ recent essential update on climate reporting