Myth-busting Climate litigation & corporate accountability: 10 misconceptions holding teams back

With over 2,666 climate litigation cases filed globally as of 2025 and landmark rulings forcing governments and corporations to accelerate emissions reductions, climate litigation has evolved from a fringe strategy to a systemic force reshaping corporate risk landscapes. The 2024 European Court of Human Rights ruling in KlimaSeniorinnen v. Switzerland marked the first time an international human rights court held a state accountable for inadequate climate action, signaling that legal accountability mechanisms are no longer theoretical threats but operational realities that demand immediate strategic attention.

Why It Matters

Climate litigation has experienced exponential growth, fundamentally altering how corporations, investors, and policymakers assess climate-related risk. According to the Sabin Center for Climate Change Law at Columbia University, the cumulative number of climate cases worldwide increased by 35% between 2023 and 2025, with cases now filed in over 55 jurisdictions across six continents. In 2024 alone, courts delivered favorable rulings for plaintiffs in 54% of decided cases where outcomes could be determined, compared to just 31% a decade earlier.

The financial materiality of this trend is substantial. A 2024 analysis by the Grantham Research Institute at the London School of Economics estimated that adverse litigation outcomes could expose the highest-emitting companies to aggregate liabilities exceeding $850 billion by 2030. Insurance underwriters have begun pricing climate litigation risk into directors and officers (D&O) policies, with premiums for carbon-intensive industries rising 15-25% annually since 2022.

Beyond direct financial exposure, litigation shapes regulatory trajectories and investor expectations. Successful cases like Milieudefensie v. Royal Dutch Shell (2021) established judicial precedents requiring specific emissions reduction targets, influencing subsequent voluntary corporate commitments and regulatory frameworks including the EU Corporate Sustainability Due Diligence Directive.

Key Concepts

Duty of Care: Legal obligations requiring entities to avoid causing foreseeable harm. Climate cases increasingly argue that emitters owe a duty of care to those affected by climate impacts, extending traditional tort principles to atmospheric pollution with global consequences.

Attribution Science: The scientific methodology linking specific climate impacts (heatwaves, floods, sea-level rise) to anthropogenic emissions. Advances in attribution science now enable researchers to quantify the contribution of individual corporate actors to specific climate events, strengthening causation arguments in litigation.

Greenwashing Claims: Cases targeting misleading environmental marketing, disclosures, or net-zero commitments. Regulators including the FTC, ASA, and ACCC have intensified enforcement, while private litigants pursue claims under consumer protection and securities fraud statutes.

Strategic Litigation: Coordinated legal campaigns designed to establish precedents, shift policy, or alter corporate behavior beyond the immediate parties. Organizations like ClientEarth deploy litigation strategically to catalyze systemic change rather than pursue individual remedies.

Shareholder Activism: Investor-driven initiatives using proxy voting, shareholder resolutions, and derivative suits to compel climate action. Follow This campaigns at major oil companies and Engine No. 1's successful ExxonMobil board campaign exemplify this approach.

Climate Litigation KPIs by Sector

Metric	Energy Sector	Financial Services	Consumer Goods
Active cases (2025)	890+	180+	240+
Plaintiff success rate	48%	52%	61%
Average case duration	4.2 years	2.8 years	2.1 years
Settlement rate	23%	41%	38%
D&O premium increase (2024)	22%	12%	8%
Disclosure compliance rate	67%	89%	74%

What's Working and What Isn't

What's Working

European Constitutional and Human Rights Frameworks: Courts in the Netherlands, Germany, Ireland, and at the European Court of Human Rights have issued binding rulings requiring enhanced governmental and corporate climate action. The German Federal Constitutional Court's 2021 Neubauer decision established that inadequate climate policy violates the constitutional rights of future generations, forcing legislative revision.

Attribution Science Integration: Scientific advances now enable precise attribution of climate impacts to specific emissions sources. The World Weather Attribution initiative has produced over 50 rapid attribution studies, with findings increasingly accepted as admissible evidence. The 2024 Luciano Lliuya v. RWE appeal in Germany advanced on attribution evidence connecting RWE's emissions to glacial melt threatening the plaintiff's property.

Mandatory Disclosure Requirements: Litigation-driven regulatory momentum has produced enforceable disclosure mandates. The EU Corporate Sustainability Reporting Directive (CSRD), California's Climate Corporate Data Accountability Act, and SEC climate disclosure rules create baseline obligations that reduce information asymmetries and establish benchmarks for breach claims.

Securities and Financial Supervision Enforcement: Financial regulators have initiated greenwashing enforcement actions with increasing frequency. The Australian Securities and Investments Commission (ASIC) pursued successful actions against Vanguard and Mercer for misleading ESG claims, while the SEC has investigated multiple asset managers for sustainability misrepresentations.

What Isn't Working

Enforcement of Judgments: Favorable rulings often lack effective enforcement mechanisms. The Shell ruling, while symbolically significant, faces ongoing compliance disputes regarding measurement methodologies and interim targets. Judicial monitoring capacity remains limited.

Jurisdictional Fragmentation: Climate impacts are global, but legal remedies remain territorially bounded. Forum shopping, corporate restructuring, and parent-subsidiary liability gaps enable defendants to minimize exposure. Cross-border enforcement of climate judgments remains largely untested.

Resource Asymmetries: Major corporations deploy substantial legal resources to delay and exhaust plaintiff capacity. Multi-year litigation costs can exceed $5-10 million for complex cases, creating barriers for affected communities and under-resourced NGOs. Defense-side spending regularly outpaces plaintiff resources by 10:1 or greater.

Causation Standards: Despite attribution science advances, courts in some jurisdictions maintain traditional causation requirements demanding proof of specific, individualized harm—a standard poorly suited to diffuse, cumulative climate damages.

Key Players

ClientEarth: London-based environmental law organization operating across Europe, Asia, and Africa. Known for shareholder derivative actions against corporate directors, including groundbreaking claims against Shell board members for alleged breach of fiduciary duty in managing climate risk.

Urgenda Foundation: Dutch environmental organization behind the landmark Urgenda v. Netherlands (2019) Supreme Court ruling requiring the Dutch government to reduce emissions 25% by 2020. This case catalyzed global replication efforts with similar suits filed in over 30 countries.

Sabin Center for Climate Change Law (Columbia University): Maintains the Global Climate Litigation Database tracking all known cases worldwide. Provides authoritative analysis supporting researchers, litigators, and policymakers in understanding litigation trends and precedents.

Greenpeace International: Coordinates climate litigation efforts globally, with notable involvement in the Greenpeace Nordic v. Norway case challenging Arctic oil licensing and various corporate accountability campaigns targeting petrochemical companies.

Grantham Research Institute (LSE): Produces rigorous empirical analysis of climate litigation trends, outcomes, and financial implications. Their annual Global Trends in Climate Change Litigation reports are essential reference documents for investors and risk managers.

Center for International Environmental Law (CIEL): Specializes in international law dimensions of climate accountability, including human rights frameworks and trade law intersections. Active in supporting litigation before regional human rights bodies.

10 Misconceptions About Climate Litigation

Misconception 1: Climate litigation is primarily a US phenomenon

Reality: While the United States hosts the largest absolute number of cases (approximately 1,800), climate litigation has globalized rapidly. Cases are now pending in Brazil, South Korea, Pakistan, Uganda, Peru, and Australia, among others. The most consequential precedents have emerged from European courts, and the Global South is increasingly active, with cases like Gbemre v. Shell Nigeria and Leghari v. Pakistan establishing important regional precedents.

Misconception 2: Courts lack the competence to address complex climate science

Reality: Courts routinely adjudicate technically complex matters—from pharmaceutical liability to financial fraud—by relying on expert testimony and structured evidentiary procedures. IPCC reports, peer-reviewed attribution studies, and court-appointed scientific advisors provide frameworks for judicial assessment. Multiple courts have demonstrated capacity to evaluate emissions trajectories, carbon budgets, and climate projections with appropriate scientific rigor.

Misconception 3: Corporate defendants always win

Reality: While corporations possess superior resources, plaintiff success rates have increased substantially. The Sabin Center's 2024 analysis found that 54% of cases with determined outcomes favored plaintiffs or established procedural precedents beneficial to future claims. Settlements, which often contain confidential terms favorable to plaintiffs, are systematically undercounted in win-loss statistics.

Misconception 4: Litigation only targets fossil fuel companies

Reality: The litigation frontier has expanded dramatically. Financial institutions face suits regarding financed emissions and misleading sustainable investment claims. Food and agriculture companies confront deforestation accountability cases. Automotive manufacturers face consumer protection claims over emissions testing fraud. Even auditors and consultants have been named in cases alleging professional negligence in climate risk assessment.

Misconception 5: Climate litigation is purely adversarial and counterproductive to collaboration

Reality: Strategic litigation often catalyzes negotiated solutions. The threat of adverse judgments incentivizes settlement discussions and voluntary commitment acceleration. Many cases resolve through consent decrees establishing monitoring frameworks and stakeholder engagement mechanisms. Litigation and engagement strategies function as complements rather than substitutes in the corporate accountability ecosystem.

Misconception 6: Attribution science cannot establish causation for individual company liability

Reality: Attribution science has matured significantly. Carbon Majors research by the Climate Accountability Institute traces 71% of global industrial greenhouse gas emissions since 1988 to just 100 entities. Source attribution combined with climate impact attribution creates evidentiary chains linking specific corporate emissions to quantifiable harms. The Luciano Lliuya v. RWE case demonstrates judicial willingness to apply this science.

Misconception 7: Greenwashing claims are difficult to prove

Reality: Greenwashing cases are among the most successful climate litigation categories. Regulatory enforcement has established clear precedents regarding actionable misrepresentations. The specificity of corporate sustainability claims—net-zero pledges, carbon neutrality assertions, sustainable fund marketing—provides concrete benchmarks against which performance can be measured. Australia, the UK, and EU member states have delivered multiple successful enforcement actions.

Misconception 8: Climate liability insurance will fully protect corporate defendants

Reality: Insurance coverage for climate liability remains uncertain and evolving. Many D&O and general liability policies contain exclusions for pollution, regulatory penalties, and intentional conduct. Insurers are increasingly unwilling to underwrite climate litigation risk at affordable premiums, particularly for high-exposure sectors. Coverage disputes are likely to generate secondary litigation as insurers contest climate claim obligations.

Misconception 9: Only environmentalists support climate litigation

Reality: Institutional investors managing trillions in assets increasingly view litigation as a mechanism for addressing systemic climate risk. Pension funds, sovereign wealth funds, and asset managers have supported shareholder derivative actions and filed amicus briefs in key cases. The investor-led Climate Action 100+ initiative, representing over $68 trillion in assets under management, explicitly coordinates engagement with litigation strategies.

Misconception 10: Regulatory frameworks make litigation unnecessary

Reality: Litigation and regulation are mutually reinforcing. Regulatory gaps—regarding Scope 3 emissions, transition plan adequacy, and historical emissions liability—leave substantial matters unaddressed by administrative frameworks. Courts serve as backstop accountability mechanisms when regulatory enforcement is delayed, captured, or jurisdictionally limited. Major regulatory advances, including the EU taxonomy and climate disclosure mandates, emerged partly in response to litigation-demonstrated governance failures.

Action Checklist

• Conduct a climate litigation exposure assessment covering operational emissions, value chain activities, and public statements susceptible to greenwashing claims
• Review D&O and general liability insurance policies for climate exclusions and coverage limitations; engage brokers regarding gap coverage options
• Implement robust internal verification procedures for sustainability disclosures, marketing claims, and net-zero commitments before publication
• Establish board-level climate risk oversight with documented consideration of litigation scenarios in strategic planning
• Engage proactively with institutional shareholders on climate governance to reduce derivative suit risk
• Monitor litigation developments in operating jurisdictions through systematic legal intelligence gathering

FAQ

Q: How should companies assess their exposure to climate litigation risk? A: Begin with a comprehensive inventory of emissions (Scopes 1, 2, and 3), public climate commitments, and sustainability marketing. Cross-reference this inventory against litigation theories gaining traction in relevant jurisdictions—duty of care claims, greenwashing enforcement, and shareholder derivative actions. Engage external legal counsel with climate litigation expertise to conduct jurisdiction-specific risk assessments and scenario modeling.

Q: What legal defenses are available to corporate defendants in climate cases? A: Common defenses include challenging standing (plaintiff's right to sue), contesting causation under traditional tort standards, invoking regulatory compliance as evidence of due care, and arguing that climate policy properly belongs to legislative rather than judicial forums (separation of powers/political question doctrines). Effectiveness varies significantly by jurisdiction and case type.

Q: How does climate litigation affect corporate valuation and investment decisions? A: Material litigation exposure increasingly requires disclosure under securities regulations and factors into credit ratings, cost of capital calculations, and M&A due diligence. Investors may apply litigation risk discounts to valuations of high-exposure companies or sectors. Conversely, robust climate governance may warrant valuation premiums reflecting reduced litigation and regulatory risk.

Q: What role do shareholders play in climate litigation? A: Shareholders may bring derivative suits alleging board breach of fiduciary duty in managing climate risk, file securities fraud claims based on material climate misrepresentations, submit and vote on climate-related shareholder resolutions, and support litigation through investor coalitions. Institutional investor engagement increasingly coordinates with litigation strategies.

Q: How can organizations stay informed about climate litigation developments? A: Essential resources include the Sabin Center's Climate Case Charts database, the Grantham Research Institute's annual litigation trends reports, and practitioner networks such as the Global Network for Human Rights and the Environment. Legal intelligence services increasingly offer climate litigation tracking modules for in-house counsel.

Sources

• Setzer, J. & Higham, C. (2024). Global Trends in Climate Change Litigation: 2024 Snapshot. Grantham Research Institute on Climate Change and the Environment, London School of Economics.
• Sabin Center for Climate Change Law. (2025). Climate Case Chart Database. Columbia Law School. Available at: climatecasechart.com
• UNEP & Sabin Center. (2024). Global Climate Litigation Report: 2024 Status Review. United Nations Environment Programme.
• Heede, R. (2024). Carbon Majors: Updating the Record, 1988-2023. Climate Accountability Institute.
• ClientEarth. (2024). Strategic Litigation for Corporate Climate Accountability: A Practitioner's Guide. London: ClientEarth Publications.
• Ganguly, G., Setzer, J. & Heyvaert, V. (2024). "If at First You Don't Succeed: Suing Corporations for Climate Change." Oxford Journal of Legal Studies, 44(1), 45-78.
• European Court of Human Rights. (2024). Verein KlimaSeniorinnen Schweiz and Others v. Switzerland, Application No. 53600/20.