Litigation surges as climate takes centre stage

DLA Piper has launched an international report on climate related litigation disputes, showing Australia comes second only to the United States.

“Due to our diverse environment and sensitivity to extreme weather events, Australia will be at the centre of climate litigation for years to come,” said Tricia Hobson, Partner, DLA Piper.  

“Organisations which fail to adopt comprehensive Environmental, Social and Governance (ESG) policies will be overly exposed to litigation risk. We are yet to see uniform standards around ESG reporting, but that’s only a matter of time,” Tricia added. 

Rhys Davies, International Sustainability & ESG Lead, DLA Piper, said the report confirmed by the end of 2020, well over 1,700 climate-related court cases had been decided worldwide. 

“Climate change risk is a real challenge for Australian companies and their Boards, with the impacts of climate change on business extending beyond carbon-intensive industries and into industries such as financial services and technology,” Rhys said. 

The United States led the field on climate disputes (1213), followed by Australia (98), United Kingdom (62), Canada (22), New Zealand (18), Spain (13), and France (11). 

“We are seeing climate litigation beyond carbon-intensive industries, with financial institutions facing increased scrutiny from ASIC on climate risk disclosures in annual reports and public statements,” said Carmen Elder, Partner, DLA Piper. 

“The number of climate disputes is only expected to grow. Stakeholders have never been better organised and are increasingly holding boards and directors to account,” Carmen added.

In Australia, financial institutions have faced action for failure to disclose climate risks in accordance with company law, in annual reports and public statements. 

“Mandatory climate-related financial disclosure by companies will increase compliance and expose companies to more climate-related claims,” she said. 

DLA Piper supports climate action through our pro-bono work and as a founding member of the Net Zero Lawyers Alliance. We were pleased to be the official legal services provider to the UK Government for COP26, the UN Climate Change Conference in Glasgow last year.