History was made last week as climate activists took on governments and “Big Oil” in legal battles around the globe for their role in the climate emergency. We break down these landmark wins and ask, what does the future of climate litigation hold?
Some of the biggest names in the fossil fuel industry, Shell, Exxon and Chevron, faced major losses last week in court and in the boardroom as climate activists pushed the industry giants to be accountable for their role in global warming and to drastically reduce CO2 emissions. The victories prompted the Head of oil and gas at Ceres, a non-profit focused on creating an environmentally friendly economy, to pronounce that “This will be seen in retrospect as the day when everything changed for Big Oil.”
And it’s not just Big Oil, we are also seeing a wave of successful cases being brought against governments. Most notably, the federal court in Australia ruled in favour group of school children who took on the Minister for the Environment.
Shell’s loss in the Netherlands
Climate activists rejoiced last Wednesday, May 26th, as the ruling in a case against Dutch Royal Shell was announced. The case was filed by seven groups including non-profits Greenpeace and Friends of the Earth Netherlands. Judge Larisa Alwin ruled that Shell is partially responsible for climate change and has ordered the company to reduce its carbon emissions by 45% by 2030, relative to 2019 levels, to align with the 2015 Paris Agreement target of preventing global temperatures from rising more than 1.5C above pre-industrial levels.
Let’s break that down. The Paris Agreement was the result of UN climate talks in Paris in 2015 and to date, it has been signed by 189 nations. The energy industry is the highest emitter of carbon and Shell is one the strongest players in the market. This court decision has required Shell to ensure its business is also aligned with the agreement. They have been given a deadline of 2030 – just nine years – to cut their net emissions by 45% applicable to 2019 levels. The cuts must include “scope 3 emissions”, which are indirect emissions and include use of sold products. When all three scopes are included, the firm produced 1.7bn tonnes of CO2 in 2019, which is on a par with Russia – the world’s fourth-largest polluter. The judgement is enforceable immediately and applies to the entire Shell group, which is incorporated in the UK and has its headquarters in The Hague.
The target is based on net emissions so there is still room for Shell to offset. However, the 2030 deadline coupled with the inclusion of technology still in development in current plans means that they will be forced to cut emissions to hit this target. In reference to Shell’s existing plans, Judge Alwin stated that they “largely amount to rather intangible, undefined and non-binding plans for the long term” making it clear that they will be under scrutiny. Shell has already announced its intention to appeal the decision.
What makes this such a game-changer?
The case is a landmark win for the climate for two reasons. Firstly, it sets a precedent that the onus is on corporations to stay in line with the Paris Agreement irrespective of what the state is doing. Before this case, the majority of successful climate-related trials were ones brought against governments but this illustrates that corporations can and will be held responsible for their role in the climate emergency. When delivering her ruling, the judge declared that “Companies have an independent responsibility, aside from what states do. Even if states do nothing or only a little, companies have the responsibility to respect human rights.” Secondly, this is the first time a fossil fuel business has had an obligation imposed on them for Scope 3 emissions. Until now, the industry has only included scope 1 and 2 emissions in their net-zero plans, largely ignoring the fact a huge percentage of the carbon released happens when fossil fuels are burned for energy by the parties that purchase them.
This case could change climate litigation everywhere and activists and non-profits show no signs of slowing down. “Our hope is that this verdict will trigger a wave of climate litigation against big polluters, to force them to stop extracting and burning fossil fuels. This result is a win for communities in the global South who face devastating climate impacts now.” Shares Sara Shaw, Friends of the Earth International.
More Challenges for Big Oil
In the same week, American oil majors Chevron and Exxon were faced with similar pressure to dramatically lower their emissions as both companies held their 2021 AGMs. At Chevron, shareholders approved a proposal for a significant reduction in the company’s “scope 3” emissions. This is huge. Shareholders are coming to a similar conclusion to courts – fossil fuel companies have a responsibility for the full lifecycle of the product. Exxon, another prominent American oil company, also suffered a blow when two environmentalists were voted onto their board at their AGM as a result of months of pressure from Engine no.1, an activist hedge fund with a small stake in the business.
These are the same companies who, despite knowing the destruction their industry inflicts on the planet, perpetuated the concept of carbon footprints to shift the blame onto consumers. In reality, we have little to no choice where we get the energy to heat and power our homes from. These wins are a signal that the narrative is finally changing. To see three of the 100 companies responsible for a whopping 71% of global emissions all making headlines in one day through climate activism is rare, and a moment to celebrate the hard work and dedication of climate-conscious changemakers everywhere.
Victory for students in Australia and Germany
Oil was not the only fossil fuel hitting headlines, coal also made the news. In Australia, eight schoolchildren filed a case against their government in relation to a proposed expansion of a coal mine. The claimants successfully argued that children are particularly vulnerable to impacts of climate change and that the Minister for the Environment, Sussan Ley, would be neglecting her duty of care to young people if she was to approve the mine’s application for expansion. The expansion would see the Vickey mine extract an additional 33 million tonnes of coal, resulting in an estimated 100 million tonnes of additional greenhouse gas emissions.
The federal court delivered a first of its kind ruling, that the environment minister does have a duty of care to avoid harm to young people as a result of climate change. “By reference to contemporary social conditions and community standards, a reasonable Minister for the Environment ought to have the children in contemplation when facilitating the emission of 100 mt of CO2 into the Earths’s atmosphere” – Justice Mordecai Bromberg.
This win is monumental when you consider the fact that the Australian government as a whole remains very pro-fossil fuels and marks a positive turning of the tide. An LSE report on trends in climate litigation notes that human rights violation is increasingly mentioned as part of lawsuits. A very recent example of this is a case in Germany, which was filed by nine youth activists and led to the country’s highest court ruling that the government’s 2019 climate law was “incompatible with fundamental rights”.
Paid to Pollute?
Another case that will be backed by the Friends of the Earth Federation was announced on May 12th. With support from Greenpeace, Friends of the Earth Scotland and the UK Student Climate Network, three climate campaigners, will take the UK government to court over their support for North Sea oil and gas. The group will argue investment in oil and gas is ‘irrational’ in light of the UK’s 2050 net-zero targets and that it fails to take into consideration that the UK has the most attractive tax regime for oil and gas businesses.
“The government is paying companies billions in public money to extract every last drop of oil from the North Sea when it should be focusing on decarbonising the UK economy,” shares Mikaela Loach, climate activist, medical student and one of the three claimants. Since 2016, the UK has paid 3.2 billion in public money. Companies, like Shell and BP, were essentially paid to pollute.
The case is a sign that governments can no longer expect their contradictory actions to go unchecked. This is supported by prominent environmentalist, George Monbiot, who recently wrote a piece for The Guardian and called out a multitude of UK government hypocrisies in direct opposition to their climate pledges, including the fact that every major airport in the UK has plans to expand.
Alongside the legal case, the trio launched a campaign Paid to Pollute to gain support from the public and expose the hypocrisies of a government that continues to incentivise fossil fuel companies despite their climate commitments. Loach’s announcement video on Instagram has already gained more than 1 million views and the campaign petition has received over 15,000 signatures. If you are in the UK, you can add your name here. The plaintiffs are now waiting for the government’s response to their application for judicial review of the Oil and Gas Authority’s (OGA’s) Strategy. If permission is granted to proceed, the case will be heard in the High Court around Autumn this year.
The future of climate litigation
The world of climate litigation is fast evolving. As more lawsuits make it into courtrooms, claimants are sharing their experiences and refining their strategies. Climate science also continues to develop, providing more and more of the evidence that is needed to put forward strong arguments in court. Since the Paris Agreement was created in 2015, there has been a surge globally in climate-related lawsuits. A recent report shows that of the 1,700 court cases recorded between 1986 and 2020, over 50% of those came 2015. In the US alone, there are around 1,300 lawsuits related to climate change right now.
While most cases have been filed against governments, and increasingly fossil fuel corporations, almost every sector is being now targeted as cases around the world boom, including dairy farming in New Zealand and insurance companies in Poland. Claimants plan to challenge everything from greenwashing to financial risk disclosure. These recent cases have broken new ground and will increase pressure for more ambitious climate change pledges.
Director of MilieuDefensie (Friends of the Earth Netherlands), Donald Pols, speaking after their win against Shell was clear that this is just the beginning, “We are already supporting other organizations to set up similar cases in their countries. This court case and verdict open a whole new approach to climate litigation and because of its success it will be copied by other civil society organisations in the rest of the world.”
But while the UK and Europe cases are becoming seeing more favourable outcomes, Brandon Barnes, senior analyst on energy litigation at Bloomberg Intelligence, was quick to point out that the same strategies are unlikely to change things stateside. “This approach is not something that works with the framework we have in the U.S. because we don’t have statutes,” he said. “If you want change or liability at a company level, you need to ask congress to pass a law, and that’s been the stumbling block in the U.S.” What might really move the needle in the US, however, is increased pressure from shareholders as we’ve seen with Chevron and Exxon boards AGMs.
It is anticipated that human rights arguments will continue to be a powerful theme in climate lawsuits and we are expected a higher number of cases involving climate refugees as more people across the earth are forced to leave their homes due to rising temperatures, droughts and increases in major weather events. As we saw in the Australian and German examples, we can also expect to see more lawsuits being filed by youth activists on the grounds that government inaction and corporate pollutions are depriving them of their right to a future.
We hope to see the climate litigation maintain the momentum and secure even more history-making wins for people and the planet.