Summary: In a world of climate and biodiversity "sticks and carrots", the law is a clear stick. But, we argue that the law is not just about action by governments and regulators. Climate and biodiversity litigation by private citizens and pressure groups, and by companies, is on the rise, and investors and sustainability professionals ignore this at their peril. Change is not just coming, its already happening.
Why this is important: Litigation is on the rise. Upcoming measures such as the 'Fit for 55' package are likely to become a major driver for new cases.
The big theme: Many investors and companies look at environmental and biodiversity legal risk as coming from actions by governments, and their various regulatory arms. This can include the various environmental agencies, financial regulators and via "reporting" requirements such as the EU taxonomy. While these are important, their weakness as a mechanism for driving change is that they rely on the various parts of government for their enforcement, which can be slow & cumbersome. But, there is increasingly another mechanism - private citizens and lobby groups using litigation to force change. This can happen more rapidly, and its increasingly having a real world impact.
Summary of a report from The Grantham Research Institute
Catherine Higham, Joana Setzer, Harj Narulla and Emily Bradeen: What do new EU climate laws mean for the courts? - March 2023
Europe is undergoing an unprecedented shift in the scale and ambition of climate policy following the announcement of the European Green Deal and the passage of the European Climate Law. There is a significant history in Europe of climate litigation being used as a lever to influence the outcomes and ambition of climate policy. Over the past three decades a broad array of litigants has used European legislation in a range of climate change cases.