The climate revolution within firms and governments

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Activism is becoming less violent and abrasive in the West, however it does not appear that it is becoming any less disruptive or effective. The newest wave of activism is coming within firms. Across the world, there has been an increase in the number of lawsuits coming against firms and governments regarding climate change. This legal route provides the cause with legitimacy often not obtained by other forms of protest.

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The case with firms are much more unconventional, the laws surrounding carbon emissions are varying across countries so it is can be difficult to build precedent on these issues. Despite this, lawsuits against large firms have been incredibly successful. Most of these suits are filed by shareholders in these large firms as these positions affords them certain rights. The most common method is sue to the company on the grounds that it did not sufficiently disclose the climate effects of its actions. Often these reports are never published or simply understate the effects. The most famous example of one of these successful suits occurred against one of the largest oil companies in the world, Exxon Mobil (Commonwealth v. Exxon Mobil Corp., 2021).

While it may seem rather trivial to file suits against these large firms due to their incredibly high profits which effectively render them immune to fines, it is not always the case. In Poland, a suit was filed by charity ClientEarth against energy company, Enea. The suit was designed to revoke plans to create a new €1.2bn coal-fired energy plant due to it underestimating the carbon-cost of the project. The suit was successful, and the plans were cancelled, this was a huge victory for climate activists in Europe and should provide enthusiasm that these suits can make tangible changes to the climate landscape (ClientEarth v Enea, 2019).

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Another method that is being used with regards to firms is the use of environmental, social and governance (ESG) metrics when investing in firms. These are a collective of non-financial factors that investors are interested in, these factors can change the share price and punish firms with large carbon emissions. It is a sign that investors are becoming increasingly aware of the results of their financial decisions.

Against governments, individuals have been claiming the government is not doing enough to curb climate change and are required to increased carbon reductions. A claim following this can be made when governments do not meet these set targets. Individuals are attempting to force governments to perform these benevolent climate acts. A successful example of this can be found in the Netherlands, where the Urgenda Foundation alongside a consortium of Dutch individuals sued. The resulting decision was that the Dutch Government had to provide increasing action to prevent the effects of climate change (Urgenda Foundation v. State of the Netherlands, 2020).

Governments are easier targets for suits for a couple of reasons. Firstly, they are much more accountable for their actions and will suits may receive support from opposition parties as a way of political game-playing. Also, even when a suit is unsuccessful in the courts, they can be very effective at drumming up support for the climate change movement by increasing press coverage and increasing public awareness.

The legitimacy being provided by these successful suits may serve to change the environment in which these large energy firms exist. In the future, we may see increasing openness and clarity from these firms about their projects.

References:

Urgenda Foundation v. State of the Netherlands. (2020, January 13). Climate Change Litigation. Retrieved 13 August 2003, from http://climatecasechart.com/climate-change-litigation/non-us-case/urgenda-foundation-v-kingdom-of-the-netherlands/#:%7E:text=On%20Oct%209%2C%202018%2C%20the,and%208%20of%20the%20ECHR.

Urgenda Foundation v. State of the Netherlands. (2020, January 13). Climate Change Litigation. Retrieved 13 August 2003, from http://climatecasechart.com/climate-change-litigation/non-us-case/urgenda-foundation-v-kingdom-of-the-netherlands/#:%7E:text=On%20Oct%209%2C%202018%2C%20the,and%208%20of%20the%20ECHR.

ClientEarth v Enea. (2019, August 2). Climate Change Litigation. Retrieved 7 May 2022, from http://climatecasechart.com/climate-change-litigation/non-us-case/clientearth-v-enea/#:%7E:text=ClientEarth%2C%20a%20non%2Dprofit%20environmental,the%20Polish%20Commercial%20Companies%20Code.