Climate Change Litigation Coming Our Way Soon

Most people have heard of the term 'green washing', a reference to false or otherwise misleading claims about the environmental credentials of an industry, company or product. It is already a significant area of activity for the Australian Competition and Consumer Commission (ACCC) who have released guidelines for business. Click here to downlaod the guidelines.

Less well known is the fact the litigation about stated environmental or climate benefits has already commenced. It was inevitable of course, and equally inevitable that the maor litigation to date has been in the US. However, there are rumblings in Australia about prospective litigation on several fronts.

First, there are the simple falsehood claims, most of which are and will be addressed by the ACCC.

Second, there is the usual activity around projected and intended developments that simply dont deliver what they promised. 'No one's fault, best of intentions, but you promised to reduce our carbon footprint and therefore our emissions liabilities and you didnt' do it, so we're taking you to court.' type of litigation. Thats just normal commercial activity.

Third and at CarbonEdge, we think of greatest concern is litigation that will attack deliberate corporate or government actions that are found or have later been found to be the cause of global warming which in turn impacts upon the lives of a person or a group of people. At one level, this could be considered as akin to asbestos litigation and in some quarters, we have heard it painted that way. But in reality, thats a cheap and overly simplistic shot.

Imagine a situation where sea levels rise and in an extreme weather event that is subsequently proven (how exactly that would be proven is a topic in its own right) to be caused by climate change, your house and the land it is on are claimed by the sea. Insurance companies claim its not their business because its a result of anthropogenically induced climate change so there must be someone to sue. So who are the candidates to sue?

Some say its Government for letting emitters 'get away with it' for so long. Good luck with that.

Others say its the emitters for 'doing it for so long'. Well, which emitters exactly would you sue?

CarbonEdge thinks you would sensibly sue the insurer, but in some ways, that is beside the point.

There is a genuinely important issue here for businesses and investors. At its simplest, we would suggest that as part of its risk management processes for considering an investment or business decision, every business should be including climate risk and their potential; whether correctly or incorrectly; to be perceived as an thus possibly to be held responsible and accountable for its consequences.

We agree that at first blush, climate litigation of this type sounds a sick joke, but on closer examination, every business needs to consider it.

Two recent articles from CarbonEdge cover aspects of this topic. Click here to read the article on the rise of climate change litigation and click here to read the article on risk management in a world of climate change.

10th October 2009

 

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