Global | Publication | September 2022
Since our last update, the growth in climate change litigation globally has continued. While cases against the fossil fuel sector continue to be brought, there are also claims against defendants in a wider variety of high-emitting and resource-intensive sectors. We are seeing an expanding and more diverse range of claimants, for example, claims brought in European courts by residents of the Global South who have been impacted by the effects of climate change. Claims arising out of allegations of “greenwashing” are becoming more prevalent as regulators, NGOs and individuals seek to hold companies and other organisations to account in respect of their sustainability claims and the actions they are taking to meet publicly announced targets. There is increasing scrutiny of how governments and corporates are complying with emissions targets and related commitments, with the courts being used to obtain information in order to increase transparency.
Businesses should be aware of the risks posed by climate litigation, including the reputational risk with the increasing focus on this area, and attempts to broaden liability, such as actions seeking to hold directors personally responsible. An awareness of the types of actions being brought and their outcomes can help businesses take appropriate steps to mitigate such risk.
As of September 2022, the total number of climate change cases filed around the world has reached 2419, up from about 1890 in February 2022.1
This legal update considers key developments and cases since February 2022.
In March 2022, the Full Federal Court of Australia overturned the earlier landmark decision of the Federal Court of Australia in Sharma v Minister for Environment, in which the Minister for Environment was held to have a novel duty of care to Australian children when exercising her powers to approve the expansion of a major coal mine in New South Wales. See our previous updates here and here for more background to the case.
The Full Federal Court of Australia overturned the Federal Court’s decision on the basis that the Minister’s decision to approve the coal mine was a policy issue and therefore not justiciable. Justifying its decision to overturn the Federal Court’s judgment, the Full Federal Court referred to the New Zealand Court of Appeal’s decision in Smith v Fonterra (see our update on this case below), in which it was stated that the “Courts are … ill-equipped to address the issues that the claim raises”, which call for “a level of institutional expertise, democratic participation and democratic accountability that cannot be achieved through a court process”.
In what is stated to be the world’s first civil climate action against a national development bank, Conectas Direitos Humanos, an NGO, filed a claim against the BNDES (the Brazilian Development Bank) and BNDESpar (the investment arm of BNDES responsible for managing its shareholdings in various Brazilian companies) in June 2022. The NGO claims that BNDESpar has no procedure in place for assessing the impact of its investments on the climate, and that this is a violation of Brazil’s commitments under both the Paris Agreement and under the National Policy on Climate Change. The NGO alleges that most of BNDESpar’s investments are in high carbon emitting sectors, such as oil and gas, meat production, mining and electrical energy, and has provided supporting evidence in the form of two technical opinions.
The NGO has asked the Federal Court to make a number of orders and submitted an urgent injunction requesting such orders be implemented before the merits of the case are decided. These include requiring BNDES and BNDESpar to adopt transparency measures in relation to their investment and divestment decisions and the monitoring of progress on the reduction of emissions, and to present a plan for their future investments which should be aligned with Brazil’s emission reduction commitments under the Paris Agreement. Finally, the NGO has called for BNDESpar to establish a Climate Situation Room to assess compliance with the targets in their plan, with access granted to various bodies including the Public Prosecutor’s Office, academics and members of the judiciary.
In November 2021, residents of Huasco filed an action against the State of Chile in which they demanded the shutdown of two units of a thermoelectric power plant following the government’s decision that its closure would not take place until 2040. The plaintiffs argued that there was no justification for this decision, particularly as Chile is a party to the Paris Agreement and has recently approved an agreement on the decarbonisation of coal-fired power plants. They claim that the decision on the closure violates their right to life and to live in an environment free of pollution as they allege that the plant’s emissions are affecting the health of residents.
In May 2022, the Court of Appeal of Copiapó rejected the claim on the basis that the issue was beyond its competence since it involved the exercise of powers reserved to the executive branch. The plaintiffs have now appealed to the Supreme Court of Chile and the appeal is pending.
In the first ever climate-related lawsuit against the Czech Government, the Municipal Court in Prague ruled on 15 June 2022 that certain acts of the Ministry of the Environment, the Ministry of Agriculture and the Ministry of Trade were illegal in that (a) they had failed to set specific mitigation measures to achieve a 55% reduction in greenhouse gas emissions by 2030 compared to 1990 levels; and (b) the current measures in place are inadequate.
The claim was brought by a group of Czech individuals, the NGO Klimatická žaloba ČR, and a Czech municipality. According to the court, the defendants had infringed the applicants’ rights to, inter alia, a healthy environment by failing to adopt a specific plan to reduce greenhouse gas emissions. In making its decision, the court reviewed the Czech Republic’s National Action Plan on Adaptation to Climate Change (2021) and concluded that it did not meet the objectives set out in the Czech Republic’s Nationally Determined Contribution (NDC) under the Paris Agreement.
The court also held that the defendants’ current measures to reduce greenhouse gas emissions were insufficient and that the defendants had not provided legitimate reasons for their inaction. The court held that, by not taking action to address climate change, the Czech Government was breaching the applicants’ fundamental human right to live in dignity, as this is conditional on an adequate environment.
The court ordered the Czech Government to take steps to ensure a healthy environment by protecting the climate, notwithstanding that climate legislation has yet to be adopted in the Czech Republic, on the basis of the following:
(a) the Paris Agreement (which is legally binding in the Czech Republic as it has been ratified as part of the Czech legal system);
(b) the Czech Constitution;
(c) the European Convention on Human Rights; and
(d) the European Climate Law (Regulation (EU) 2021/1119).
All of the defendants have appealed the decision by filing cassation complaints to the Supreme Administrative Court of the Czech Republic. This means that the applicants will not receive a retrial but the higher court will merely assess whether the law was correctly applied to the facts of the case.
In January 2022, Friends of the Earth commenced judicial review proceedings in England against the Secretary of State for Business Energy and Industrial Strategy in respect of two decarbonisation policies adopted by the UK government, alleging breaches of the Climate Change Act and Equality Act. ClientEarth and the Good Law Project filed similar challenges and the cases were heard together.
On 18 July 2022, the High Court found in favour of the claimants, ruling that the Net Zero Strategy (the government’s economy wide decarbonisation strategy) had been unlawfully adopted. This was on the grounds that when adopting the strategy, the Secretary of State did not have sufficient information at his disposal, and the strategy lacked vital information which meant that Parliament and the public were unable to scrutinise it properly. This was in breach of sections 13 and 14 of the Act which require the Secretary of State to produce policies which will enable carbon budgets set under the Act to be met and to report on those policies to Parliament. Further, the court granted the claimants declaratory relief and a subsequent mandatory order requiring the Secretary of State to lay a new report before Parliament by March 2023.
A decision by UKEF (the UK’s export credit agency) to back a liquefied natural gas project in Mozambique has been unsuccessfully challenged by Friends of the Earth in judicial review proceedings. See our previous updates here and here for more background to the case.
The campaigners claimed that the decision was unlawful as it was not aligned with the UK and/or Mozambique’s Paris Agreement commitments and failed to take into account relevant considerations, including the project’s Scope 3 emissions.
In March 2022, a split two judge panel found that the decision was lawful, concluding that the decision-making process of UKEF was multifaceted and involved balancing different policy considerations. These included not only climate change but other factors, such as the eradication of poverty in Mozambique.
Friends of the Earth has been granted permission to appeal.
Five young European citizens filed a claim in January 2022 before the European Court of Human Rights against Austria and 11 other states.
The applicants allege that their rights under the European Convention on Human Rights – in particular, Art. 2 (right to life), Art. 3 (prohibition of torture), Art. 8 (right to respect for private and family life) and Art. 14 (prohibition of discrimination) – have been adversely affected by extreme weather events which, they allege, are directly linked to climate change.
More specifically, the applicants argue that the fossil fuel industry is to a large extent responsible for climate change yet the 1994 Energy Charter Treaty – which the respondent states have ratified –protects investors in the energy sector and therefore deters the respondent states from taking measures against climate change. This in turn means the respondent states will not achieve the targets agreed in the 2015 Paris Agreement.
Greenpeace is seeking a judicial review of the decision made by the UK Secretary of State for Business, Energy and Industrial Strategy and the North Sea Transition Authority following their approval of a new North Sea gas field (Shell’s Jackdaw project) without considering the climate damage caused by burning the gas extracted. Greenpeace alleges that the gas from Jackdaw, when burnt, is set to generate more CO2 than the annual emissions of Ghana.
The Scottish Courts will decide whether to grant Greenpeace permission to proceed with the legal challenge. In a separate legal action (which was unsuccessful in the Scottish Courts) Greenpeace is seeking permission from the Supreme Court to challenge bp’s permit to extract oil from the Vorlich field, also located in the North Sea. The Jackdaw judicial review may be put on hold until the Supreme Court decides whether to hear an appeal in the Vorlich case.
On 21 June 2022, the Australian Conservation Foundation filed a claim in the Federal Court of Australia against the Woodside Energy Group, who are proposing to build a major new gas project off the coast of Western Australia.
The project has never been assessed for its climate change impacts as, in Australia, new oil and gas projects do not need to be approved under Australia’s environmental protection law unless they are likely to have a significant impact on the heritage values of the Great Barrier Reef. The Foundation is arguing that the project will have a significant impact on the heritage values of the Great Barrier Reef as it is estimated to cause 1.37 billion tonnes of greenhouse gas emissions over the next 25 years (i.e. over three times Australia’s current annual emissions), which will materially contribute to climate change and therefore lead to coral bleaching events on the Great Barrier Reef.
On 14 July 2021, the UK Secretary of State for Transport announced a review of the National Policy Statement on National Networks. The Policy Statement sets out government policy regarding nationally significant infrastructure, rail and road projects for England. The government agreed to the review partly because the Policy Statement did not reflect or incorporate the various climate change initiatives, such as the commitment to net zero or its transport decarbonisation plan. However, the Secretary of State declined to exercise his statutory power to suspend the Policy Statement pending this review.
Transport Action Network, an environmental NGO, has been calling on the government to review the Policy Statement since October 2020 and had brought two claims for judicial review to facilitate this. TAN welcomed the Secretary of State’s decision to review the Policy Statement but, in September 2021, brought a further claim for a judicial review to challenge the decision not to suspend the Policy Statement pending the review.
On 9 March 2022, the High Court rejected the NGO’s application for judicial review. The court held it could not be argued that the conditions for launching the review had not been properly addressed or that the Secretary of State had erred in law by failing properly to consider how planning inspectors would deal with applications during the review. It was held that the existing wording of the Policy Statement could be sensibly applied and planning inspectors were more than capable of considering it in line with the relevant climate change initiatives.
This case was originally brought in Switzerland in 2016 by a group of Swiss women against various Swiss federal authorities on the basis that their health was threatened by heatwaves which were being exacerbated by climate change.
Following the dismissal of the claim in April 2017 and the rejection of an appeal in May 2020 by the Swiss Supreme Court, the case was elevated to the European Court of Human Rights (ECtHR), which accepted it in March 2021 (see our August 2021 update). Exceptionally, on 26 April 2022, the Chamber of the ECtHR relinquished jurisdiction in favour of the Grand Chamber of the Court. The case will now be heard by the 17 judges of the Grand Chamber because the case raises a serious question affecting the interpretation of the European Convention on Human Rights. This represents the final level to which the claim can be appealed and the judgment of the Grand Chamber will be final.
On 29 July 2022, the Competition and Markets Authority (CMA) announced that it was commencing an investigation into fashion brands ASOS, Boohoo and George at Asda over concerns that the companies’ green claims are misleading customers. The investigation is being brought to establish whether:
(a) the companies have sufficient evidence to support claims that their products, including clothing, footwear and accessories, are sustainable or better for the environment; and
(a) the statements and language used by the businesses are too broad and vague.
The CMA has stated that this investigation is just the beginning of its scrutiny of the fashion sector and other sectors will come under review in due course as part of its wider investigation into misleading environmental claims.
In March 2022, three French NGOs, led by Greenpeace France and supported by ClientEarth, commenced proceedings against TotalEnergies Electricité et Gaz France and the head of its corporate group, TotalEnergies SE (TotalEnergies), alleging that TotalEnergies’ advertising campaign has misled French consumers. They are seeking compensation and an injunction to stop the campaign.
Specifically, the NGOs allege that TotalEnergies’ campaign first launched in May 2021 has:
(b) involved false claims about the companies’ aims for carbon neutrality by 2050; and
(c) made misleading assertions regarding the supposed environmental virtues of other fuels, such as biofuels being a “low-carbon alternative” that "emit half as much CO2 as their fossil equivalents".
This is a Freedom of Information Act claim filed by the Southern Environmental Law Center, a non-profit public interest organisation “dedicated to protecting the environment of the Southeast.” On 24 March 2022, the Center filed a complaint in which it asked the US District Court for the Eastern District of Tennessee to compel the Tennessee Valley Authority (TVA) to disclose to them full copies of various contracts between the TVA and two gas companies. In response to the Center’s earlier request for information, the TVA had supplied copies of these contracts with significant portions redacted, relying on certain exemptions in the Act to justify the redactions. The Center claims such exemptions are not applicable. The Center stated aim is to protect the people and natural resources of the Southeast and in its complaint it argues that it needs to review the redacted contractual provisions “to continue to fully participate in public decision making processes about TVA’s power generation decisions, and to determine whether TVA has complied with the National Environmental Policy Act in connection with its plan to build new gas plants.”
Since our August 2021 update, the Court of Appeal of England and Wales has considered Ms Finch’s appeal. She appealed against the High Court’s decision which dismissed her challenge of Surrey County Council’s decision to grant Horse Hill Developments Ltd planning permission to expand its oil drilling and production site in Surrey, England. On 17 February 2022, the Court of Appeal dismissed the appeal.
In respect of the argument on “downstream” greenhouse gas emissions, the court held that the planning authority had a reasonable and lawful basis for deciding that the environmental effects of downstream emissions could reasonably be seen as far removed from the proposed development itself, and not causally linked to it. This was because of the various intervening stages between the extraction of the oil and the ultimate generation of those emissions.
In respect of the argument on the Council’s failure to assess the indirect carbon emissions, the court held that the authorities did not establish that the relevant legislation compelled the assessment of environmental effects from the use of an “end product” where those environmental effects were not actually effects of the proposed development itself.
Climate litigation continues to gather pace as it is increasingly used as a means to enforce climate commitments and hold governments and corporates to account. Trends to look out for include claims involving personal responsibility, “greenwashing” cases where climate commitments over-rely on remedial steps rather than a reduction in emissions and/or claims are not sufficiently supported by scientific evidence, and claims seeking financial recourse for damage resulting from climate change.2
Please contact a member of our climate change team if you would like further information about any of the cases covered in this update, or would like to discuss climate change issues more generally.
Publication
On September 18, 2024, the "Decree amending the list that sets forth goods whose import and export are subject to regulation by the Ministry of Energy" (the "Decree") was published in the Federal Official Gazette.
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