Global citizens: We may have to sue our way out of the climate crisis

Britain and the British are baking in a record-breaking 40-plus degrees Celsius heatwave. Large parts of Europe, including France and Spain are under extreme heat stress, as wildfires rage. 

This summer’s heatwave demonstrates that for an increasing number of us, we are already living inside a climate tipping point, a disjunctive break and shift from one steady state to a new hotter, much more dangerous one. Still again and again national political leaders fail to deliver on their political and legal commitments to net zero plans, the urgent and necessary changes in policy and practices required to tackle and eventually reduce rising greenhouse gas emissions, now at 421 parts per million. 

The platitudes, the ‘blah blah blah,’ of empty declarations, are as Greta Thunberg excoriated, woefully insufficient. But finally, at long last leaders public and private are beginning to be held legally accountable for their doubletalk and dissembling.

On July 18. the United Kingdom’s High Court showed us that activists can use the courts and legal system in Europe to force the pace of policy action. In a major ruling and order, the court ruled that the U.K. strategy for net zero was inadequate and unlawful. The U.K. Climate Change Act requires the government to hit net zero by 2050 and to make proposals on how it will meet that annual carbon target. The court found the government’s plan did not comply with the law — it was too vague to demonstrate statutory net zero targets would be met.

This landmark case, brought by The Good Law Project will force the government to recast its net zero plans and replace platitudes with measurable and tougher paths to annual goals. The ruling made clear the law does not permit the government to replace reality and scientific facts with political narratives that obscure rather than cut greenhouse gas emissions. 

This U.K. case and a growing number of other judgments highlight how citizens can use national court systems to hold their leaders to account for failures to deliver on climate policy implementation and help ensure policy matches the planetary promises.

French courts have stepped forward to ensure green policies are not merely broken promises. In October, the Paris administrative tribunal ruling ordered the French government to take all necessary measures to address ecological damages and emissions by the end of December 2022 at the latest. France — like the U.K. — has enacted legally binding net zero commitments; hence the willingness of judges to step into action.

In 2021 the Hague District Court in the Netherlands ordered Royal Dutch Shell to reduce its worldwide CO2 emissions by 45 percent by 2030 (compared to 2019 levels).  The court found that the company had an obligation to reduce CO2 emissions resulting from the Shell group’s activities, including suppliers and end-users. The court found that Shell’s climate policies were insufficient, which was no surprise to observers. The Dutch court’s ruling drew on a series of earlier judgments requiring the government to lower emissions, and hence, the role that private firms must also play. The was the first time any court imposed a duty on a company to do its share to prevent dangerous climate change.    

These rulings (and I expect many more) show courts — excluding, for now, unfortunately, U.S. courts — can be key allies in the fight against climate change and against governments and private firms’ stalling restorative actions.

Today corporate boards of directors need to take note of the rising legal risks they face. Many firms have now agreed in principle to net zero plans, urged on by Mark Carney, UN Special Envoy in Finance and Climate, and the Glasgow Financial Alliance for Net Zero (GFANZ). These commitments, by many of the world’s largest firms, must now be implemented and pursued year by year.

Chairs and non-executive directors need to ask probing and consistent tough questions of their firms’ senior management. What is our net zero plan short, medium and long-term? How are progress and failure being measured and reported? Are our employees being judged against related green business targets? What science-based standards are you using? Is our annual net zero plan being reviewed and audited?

With most regulators beginning to (including America’s Securities and Exchange Commission), implement transition reporting and disclosure standards, these types of questions and the answers they elicit can help firms achieve net zero goals and inoculate them against future legal jeopardy.

Going forward, directors of firms that consistently fail to design and implement workable net zero plans could be held legally liable for their failures because these mistakes can cost lives, result in lost profits and create unacceptable and firm-level rising risks. Equity owners will seek redress for net zero firm-level failures. Directors will face real legal danger if they do not embed and monitor net zero plans and goals within their strategies. Firms will need to measure against science-based comparable green standards.

What if firms are merely greenwashing and engaging in virtue signaling, rather than real changes to strategies and plans? If this is discovered the courts and regulators will be pressed to intervene.

The example of Deutsche Bank and alleged fraudulent greenwashing by the DSW subsidiary, now being investigated by German prosecutors, illuminates just this type of danger for major firms that opt for bogus ESG standards. We all should suspect that many other ESG funds’ investment claims are shaky at best, or fraudulent at worst.

Increasingly, lawyers will be called, and suits filed. Younger green activist investors are hardly likely to let their advisors off the hook for poor counsel, and dubious polluting investments: The courts will be used to punish bad actors and CEOs should take note.

Climate breaking points are upon us, as this summer’s scorching temperatures demonstrate. We can despair, but we must also support the increasing use of legal challenges across our markets and economies to help turn weak political net zero promises into meaningful legally binding rulings and implementation. Citizens, investors and stakeholders should use the law to enforce net zero plans, at the national and firm level. In many countries, the legal frameworks for these types of cases already exist. 

I suggest that if you care about the green transition, it may now be time to call your lawyer. 

Stuart P.M. Mackintosh is Executive Director of the Group of Thirty, and author of “Climate Crisis Economics.”