Deep dive: Climate litigation & corporate accountability — the fastest-moving subsegments to watch

The number of climate-related court cases worldwide surpassed 2,700 by the end of 2025, more than double the count recorded in 2020, according to the Grantham Research Institute on Climate Change and the Environment (LSE, 2026). Over 190 of those cases directly targeted corporate actors for inadequate emissions reductions, misleading sustainability claims, or failure to disclose material climate risks. The litigation wave is reshaping corporate behavior at a pace that voluntary commitments and regulatory frameworks have not matched. For procurement leaders operating in emerging markets, understanding which litigation subsegments are accelerating fastest is critical for anticipating supply chain risks, adjusting due diligence requirements, and ensuring contractual protections remain current.

Why It Matters

Climate litigation has evolved from a niche area of environmental law into a systemic risk factor for corporate valuations, supply chain continuity, and procurement strategy. Courts in at least 55 countries have now heard climate-related cases, with emerging market jurisdictions including Brazil, India, Colombia, South Korea, and Nigeria recording significant increases in filings since 2023 (United Nations Environment Programme, 2025). The financial consequences are no longer hypothetical: Shell's landmark 2021 Dutch court ruling requiring a 45% emissions reduction by 2030 was followed by similar duty-of-care claims against TotalEnergies in France and ENI in Italy, establishing a pattern that is extending to companies across energy, agriculture, construction, and consumer goods.

The shift matters for procurement because liability increasingly flows through supply chains. The EU Corporate Sustainability Due Diligence Directive (CSDDD), which enters phased application from 2027, creates statutory liability for companies that fail to prevent adverse environmental impacts in their value chains. Courts in multiple jurisdictions have begun applying analogous principles even in the absence of specific legislation, citing general duty-of-care doctrines and human rights frameworks. Procurement teams that do not integrate litigation risk into supplier assessments face exposure to both direct legal liability and indirect reputational and operational disruption when key suppliers become litigation targets.

The cost of climate litigation defense alone can be substantial. A 2025 survey by the International Bar Association found that major corporations facing climate litigation spend an average of $4.5 million to $12 million per case in legal fees, with complex multi-jurisdictional cases exceeding $30 million. Insurance coverage for climate litigation is tightening, with Lloyd's of London reporting a 35% increase in climate-related liability exclusions across commercial policies in 2025 (Lloyd's of London, 2025).

Key Concepts

Duty-of-care litigation applies existing tort law principles to hold companies responsible for failing to take reasonable steps to reduce greenhouse gas emissions or adapt to foreseeable climate impacts. This approach does not require specific climate legislation. Courts assess whether a company's emissions trajectory, disclosure practices, and transition planning meet a standard of reasonable care given the scientific consensus on climate change. The Dutch Milieudefensie v. Shell ruling established the benchmark, and courts in France, Germany, Brazil, and South Korea have since applied similar reasoning.

Greenwashing enforcement actions target companies making environmental claims that are misleading, unsubstantiated, or inconsistent with their actual business practices. Enforcement has expanded beyond advertising standards authorities to include securities regulators, consumer protection agencies, and competition authorities. The EU's Green Claims Directive, effective from 2026, requires companies to substantiate all environmental claims with verified lifecycle data and prohibits generic claims such as "eco-friendly" or "sustainable" without specific, measurable backing.

Climate risk disclosure litigation involves lawsuits against companies or their directors for failing to adequately disclose material climate-related financial risks in regulatory filings, annual reports, or investor communications. Cases typically allege violations of securities law, fiduciary duty, or specific climate disclosure regulations. The increasing stringency of mandatory disclosure frameworks (CSRD, SEC Climate Rules, ISSB Standards) is generating a growing body of case law around what constitutes adequate climate risk disclosure.

Rights-based climate claims invoke constitutional rights, human rights treaties, or statutory environmental rights to compel government or corporate climate action. Courts in Colombia, India, Pakistan, and Ecuador have recognized constitutional rights to a healthy environment that impose affirmative obligations on both states and private actors. The Inter-American Court of Human Rights issued an advisory opinion in 2024 establishing that states have obligations to prevent transboundary climate harm, which plaintiffs are now citing in cases against multinational corporations operating in Latin America.

What's Working

Greenwashing Enforcement at Scale

Greenwashing enforcement has become the fastest-accelerating subsegment of climate litigation globally, with a 78% increase in cases filed between 2023 and 2025 (Climate Litigation Database, 2026). Australia's Federal Court ruled against Santos in 2024 for claiming its natural gas operations had a credible pathway to net-zero emissions, finding the company's transition plan lacked the specificity and investment commitments necessary to support the claim. The Australian Securities and Investments Commission subsequently issued guidance requiring all ASX-listed companies to ensure climate-related claims in investor materials are supported by quantified, time-bound plans with identified capital expenditure.

In Brazil, the Consumer Defense Institute (IDEC) brought a successful action against JBS in 2025 for marketing beef products as "sustainable" while the company's suppliers were linked to deforestation in the Amazon. The court ordered JBS to withdraw the marketing materials and implement verified supply chain monitoring within 12 months. The ruling established a precedent in Brazilian consumer law that sustainability claims about products must account for upstream supply chain impacts, directly affecting procurement requirements for any company sourcing agricultural products from the region.

The EU's coordinated enforcement sweep in late 2025, conducted by consumer protection authorities across 14 member states, reviewed over 600 corporate environmental claims and found that 53% failed to meet the substantiation requirements of the Green Claims Directive. Companies were given 30 days to either substantiate or withdraw claims, with penalties of up to 4% of annual turnover for non-compliance.

Shareholder and Director Liability Claims

Shareholder derivative actions and director liability claims related to climate change have emerged as a powerful accountability mechanism, with 47 cases filed globally in 2025 alone (Commonwealth Climate and Law Initiative, 2026). ClientEarth's case against Shell's board of directors, while ultimately dismissed on procedural grounds in the UK, catalyzed a wave of similar actions in other jurisdictions. In South Korea, shareholders of POSCO filed a derivative action in 2025 alleging that the board's failure to develop a credible decarbonization plan for the company's steel operations constituted a breach of fiduciary duty, citing the company's exposure to $2.3 billion in stranded asset risk under a 1.5 degree scenario.

In Australia, the Retail Employees Superannuation Trust (REST) settled a landmark case in 2024 in which a member alleged that the fund's failure to adequately assess and act on climate risks in its investment portfolio breached its fiduciary duties. The settlement required REST to implement enhanced climate risk assessment procedures across its entire portfolio, including Scope 3 emissions analysis for all holdings above A$50 million.

Rights-Based Constitutional Claims in Emerging Markets

Constitutional climate litigation is producing binding outcomes in emerging market jurisdictions at an accelerating rate. Colombia's Supreme Court ruled in its landmark 2018 Atrato River decision that the Amazon rainforest possesses legal rights, and subsequent rulings have extended this framework to impose obligations on corporate actors operating in ecologically sensitive areas. In 2025, a Colombian court ordered Ecopetrol to conduct a comprehensive climate impact assessment for all new exploration activities and to demonstrate alignment with the Paris Agreement temperature goals as a condition of receiving environmental permits.

India's National Green Tribunal has issued over 30 climate-related orders since 2023, including a 2025 directive requiring all thermal power plants to submit transition plans with specific closure or conversion timelines. The Tribunal's orders have direct procurement implications: power purchase agreements with non-compliant thermal plants face legal uncertainty, and procurement teams sourcing energy in India must now assess supplier compliance with Tribunal directives.

What's Not Working

Enforcement of Court-Ordered Emissions Reductions

Courts have proven willing to order emissions reductions, but enforcement mechanisms remain inadequate. The Shell ruling ordered a 45% reduction in absolute emissions by 2030, but five years after the decision, monitoring compliance depends on Shell's own reporting, and no independent verification mechanism has been established. Legal scholars at the Sabin Center for Climate Change Law note that courts lack the institutional capacity to monitor and enforce complex, multi-year emissions reduction orders against multinational corporations operating across dozens of jurisdictions (Sabin Center, 2025).

In emerging markets, enforcement challenges are more acute. Brazilian court orders against deforestation-linked companies frequently go unenforced due to limited monitoring capacity and jurisdictional fragmentation between federal and state authorities. Colombian constitutional rulings recognizing ecosystem rights have produced compelling legal precedents but have not consistently resulted in changed corporate behavior on the ground.

Jurisdictional Fragmentation and Forum Shopping

The global nature of corporate operations allows companies to structure activities to minimize litigation exposure in high-risk jurisdictions. A multinational corporation headquartered in a jurisdiction with weak climate litigation frameworks can maintain the same emissions-intensive operations while facing less legal risk than a competitor headquartered in the Netherlands, France, or Australia. This dynamic creates competitive distortions and reduces the systemic impact of litigation. Attempts to establish universal jurisdiction for climate claims have not gained traction, and the recognition and enforcement of foreign climate judgments across borders remains legally uncertain.

Access to Justice Barriers in Emerging Markets

Despite the growth in climate litigation across emerging markets, significant barriers to access remain. Filing fees, legal costs, evidentiary burdens, and the duration of proceedings can be prohibitive for affected communities and civil society organizations. In India, National Green Tribunal cases take an average of 3.5 years to reach resolution. In Brazil, environmental cases in federal courts average 4.2 years. The financial and organizational resources required to sustain multi-year litigation against well-funded corporate defendants remain a fundamental constraint on the effectiveness of climate litigation as an accountability tool.

Key Players

Established Organizations

• ClientEarth: a nonprofit environmental law organization that has filed strategic climate cases against major corporations and financial institutions across Europe, including landmark actions against Shell's board and multiple coal-fired power plant operators
• Urgenda Foundation: the Dutch organization that secured the first successful climate liability ruling against a national government in 2015 and continues to support duty-of-care litigation strategies worldwide
• Sabin Center for Climate Change Law: Columbia University's research center maintaining the global Climate Change Litigation Database, tracking over 2,700 cases and providing analytical resources for practitioners
• United Nations Environment Programme: publisher of the annual Global Climate Litigation Report and provider of technical assistance to judiciaries in emerging markets on climate science and legal frameworks

Startups and Specialist Firms

• Pollination: a climate advisory and investment firm with a dedicated legal strategy practice that advises corporations on litigation risk assessment and proactive climate governance
• Clyde & Co Climate Risk Practice: a specialist insurance and litigation practice tracking climate liability trends and advising on directors' and officers' liability exposure
• Plan A: a Berlin-based carbon accounting platform whose verified emissions data is increasingly used as evidentiary material in greenwashing enforcement actions

Investors and Funders

• Climate Litigation Accelerator: a philanthropic funding vehicle channeling $50 million annually to strategic climate litigation in emerging markets across Latin America, South Asia, and Sub-Saharan Africa
• European Climate Foundation: a major funder of strategic litigation and policy advocacy, supporting organizations filing cases across EU member states
• Children's Investment Fund Foundation: providing $30 million in grants for climate accountability litigation, with a focus on cases targeting financial institutions and fossil fuel companies

KPI Benchmarks by Use Case

Metric	Greenwashing Enforcement	Duty-of-Care Claims	Director Liability	Rights-Based Claims
Cases filed (2025)	230+	85+	47	60+
Average case duration	1.5-3 years	3-6 years	2-4 years	3-5 years
Success rate (plaintiff)	55-65%	25-35%	10-20%	40-55%
Average defense cost	$2-8M	$5-15M	$3-10M	$1-5M
Jurisdictions with active cases	35+	20+	12+	25+
Year-over-year case growth	78%	42%	55%	38%

Action Checklist

• Map your supply chain exposure to jurisdictions with active or emerging climate litigation frameworks, prioritizing the EU, Australia, Brazil, India, Colombia, and South Korea
• Audit all public-facing environmental claims (marketing materials, product labels, investor communications) against the EU Green Claims Directive substantiation requirements
• Require key suppliers to provide verified emissions data and transition plans as part of standard procurement due diligence
• Assess directors' and officers' insurance coverage for climate-related liability, and negotiate expanded coverage where gaps exist
• Establish a litigation monitoring function that tracks new climate case filings in jurisdictions relevant to your operations and supply chain
• Incorporate climate litigation risk clauses into supplier contracts, including requirements for climate risk disclosure, emissions reduction targets, and indemnification for greenwashing-related claims
• Engage legal counsel with climate litigation expertise to conduct a pre-litigation vulnerability assessment across your operations and value chain
• Develop internal protocols for responding to regulatory inquiries related to environmental claims, ensuring consistency between legal, sustainability, and marketing functions

FAQ

Q: How does climate litigation in emerging markets differ from litigation in the EU or US? A: Emerging market litigation relies more heavily on constitutional rights and public interest frameworks rather than securities law or specific climate regulations. Courts in Colombia, India, and Pakistan have recognized constitutional rights to a healthy environment that create obligations for both governments and private actors. Cases tend to be brought by civil society organizations or affected communities rather than shareholders. Remedies often include structural orders (requiring government agencies to develop climate action plans) rather than monetary damages. However, the trend is converging: emerging markets are increasingly adopting mandatory disclosure requirements and due diligence legislation that will generate litigation patterns more similar to EU and US models.

Q: What procurement contract clauses help manage climate litigation risk? A: Include provisions requiring suppliers to substantiate any environmental claims with verified third-party data and to maintain compliance with applicable climate disclosure regulations. Add indemnification clauses covering losses arising from a supplier's greenwashing claims or failure to comply with emissions reduction commitments. Require annual reporting on Scope 1, 2, and material Scope 3 emissions using recognized frameworks (GHG Protocol, ISSB). Include termination rights triggered by a supplier becoming subject to adverse climate litigation judgments or regulatory enforcement actions that materially affect their ability to fulfill contractual obligations.

Q: How should companies prepare for the EU Green Claims Directive? A: Begin by inventorying all environmental claims made across marketing, packaging, investor materials, and digital channels. For each claim, assess whether it can be substantiated with specific, quantified evidence based on recognized scientific methodologies and full lifecycle assessment. Remove or reformulate any generic claims ("eco-friendly," "green," "sustainable") that cannot be tied to measurable environmental improvements relative to a defined baseline. Establish internal review processes requiring sign-off from both legal and sustainability functions before any new environmental claim is published. Engage third-party verification providers to audit high-profile claims before the Directive's enforcement date.

Q: Are companies in emerging markets at lower risk of climate litigation? A: Not necessarily. While the volume of cases is lower in many emerging markets, the legal frameworks are evolving rapidly. Constitutional rights provisions in countries like Colombia, India, Ecuador, and South Africa provide broad bases for climate claims that do not exist in many developed-market legal systems. National Green Tribunals and specialized environmental courts in India, Brazil, and the Philippines can move faster than general courts. Companies operating in emerging markets also face litigation risk in developed-market jurisdictions if their parent companies, investors, or customers are domiciled in the EU, UK, or Australia, where extraterritorial duty-of-care principles are being tested.

Sources

• Grantham Research Institute on Climate Change and the Environment. (2026). Global Trends in Climate Change Litigation: 2026 Snapshot. London: London School of Economics.
• United Nations Environment Programme. (2025). Global Climate Litigation Report: 2025 Status Review. Nairobi: UNEP.
• Lloyd's of London. (2025). Climate Liability and the Insurance Market: Emerging Trends in Exclusions and Coverage. London: Lloyd's.
• Commonwealth Climate and Law Initiative. (2026). Director Liability for Climate Change: Global Case Tracker 2026. Oxford: CCLI.
• Sabin Center for Climate Change Law. (2025). Enforcing Climate Judgments: Challenges and Mechanisms. New York: Columbia Law School.
• Climate Litigation Database. (2026). Greenwashing Enforcement Trends: Annual Statistical Review. London: Grantham Research Institute.
• International Bar Association. (2025). Climate Change Litigation: Costs, Risks and Outcomes for Corporate Defendants. London: IBA.