Seismic increase in climate litigation

High-polluting companies are clear targets, but their shareholders – the asset managers – could be next

“If asset managers are not worried about climate litigation, they should be.”

That’s the stark warning to fund groups amid an explosion of climate litigation cases around the world targeting various sectors and players in the fight against climate change.

LSE’s Grantham Research Institute on Climate Change and the Environment, and the Centre for Climate Change and Economics and Policy, reported in June 2022 that climate-change-related cases have more than doubled worldwide since 2015, with around 300 cases filed in the 18 months preceding the report.

High-profile cases, such as those put to the Shell board and Volkswagen, are obvious in terms of their targeting of the highest-polluting industries. But their shareholders – the asset managers – could be next on the list.

“We are one case away from whole house of cards of finance having a cold east wind blowing over,” says Amy Clarke, chief impact officer at Tribe Impact Capital, and member of the ESG Clarity EU Committee, who also issued our introductory warning.

“There has been an unbelievable amount of cases around the world, but we are on the cusp of a massive and seismic increase in the amount of climate litigation.”

In terms of corporates, she highlights that so little has been done in tackling climate change that we are now in desperate times, which call for desperate measures.

“Had we started this 20-40 years ago it wouldn’t be nearly as disruptive and disorderly as it will need to be now to get the pace of change required.

“With this lack of progress, NGOs are now turning to the law to hold these companies to account – we have tried the alternatives and that’s not driving the change.”

Read the full analysis in ESG Clarity’s June 2023 digital magazine


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...