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climate change disputes and the law

linked to the management of a company
and therefore related “to commercial
companies” within the meaning of
the French Commercial Code. This
decision was upheld by the Versailles
Court of Appeal in December 2020.
However, on 11 February 2021, in a
separate litigation brought against Total
under the Corporate Duty of Vigilance
law, the Civil Court of Nanterre this
time ruled that it had jurisdiction to
determine the climate change-related
claim, noting that, whilst the vigilance
plan undoubtedly affects the operations
of a company, its purpose and the
risks it is intended to prevent go far
beyond this. Although the Nanterre
Civil Court did not rule on the merits
of the claim against Total, the fact that
it confirmed its jurisdiction to do so is
a major development, which is likely failed to consider the government’s whose views do not align with their
to encourage the commencement of climate change commitments under own. Under this increasing scrutiny,
further claims in that forum. the Paris Agreement. This decision was some companies are also being asked
Similarly, the French government has then overturned by the Supreme Court by their shareholders to disclose
also faced legal challenges. In February in December 2020, which considered how their business models will be
2021, in a case referred to by the Paris that the Paris Agreement was beyond compatible with a net zero economy.
administrative court as the ‘Trial of the the scope of what the policy statement In addition to exercising their voting
Century’, four NGOs – Oxfam France, had to take into account. Nevertheless, rights and exerting political pressure,
Greenpeace France, Notre Affaire à challenges remain for Heathrow’s shareholders have also proved that
Tous and the Fondation pour la Nature expansion plan. In particular, it still they are not opposed to legal action.
et l’Homme – prevailed in their action requires a development consent order In 2016, the shareholders of the
against the French government for which will need to be considered in Commonwealth Bank of Australia (CBA),
failing to fulfil its obligations to reduce light of the UK government’s target to initiated litigation proceedings alleging
greenhouse gas emissions in line with achieve carbon neutrality by 2050, as that CBA’s 2016 annual report violated
the Paris Agreement. well as its pledge to cut emissions by 68 Australian company law by failing to
There has also been an increase per cent by 2030. disclose climate change related business
in climate change-related actions risks related to possible investment in
concerning infrastructure projects, These claims and challenges a controversial coal mine. This claim
as countries set new targets related was later withdrawn following an
to climate change mitigation that are just examples of the acknowledgement by CBA’s directors
directly impact planning controls. Two broad range of actions that in its 2017 annual report that climate
recent decisions in the English courts are now being taken, both change presented a risk to CBA’s
have highlighted the tension between business operations, which was the
investors in infrastructure projects and within and outside the courts, first time such a statement had been
the UK government’s obligations to to hold governments and included in its annual reporting.
combat climate change. businesses to account for their These claims and challenges are just
In January 2021, in a legal challenge environmental impact examples of the broad range of actions
brought by ClientEarth disputing the UK that are now being taken, both within and
government’s approval of a new gas-fired outside the courts, to hold governments
power plant on the basis of its climate The rising sense of urgency to take and businesses to account for their
impact, the Court of Appeal, determined action against climate change has environmental impact. They plainly
that decision-makers must consider a also prompted shareholders to utilise demonstrate why climate change is
project’s carbon lock-in risk and can traditional business mechanisms, such as becoming an increasingly pressing item
refuse permission for the project on the voting on climate change resolutions at on governmental and corporate agendas.
basis of its climate impact (although it annual meetings, for environmental goals. Governments and businesses of all
ultimately dismissed the underlying Shareholders at a number of financial types have potential exposure to liability
claim brought by ClientEarth). and energy companies have proposed for climate change-related harm. It is
The other recent decision concerns and voted in favour of setting climate therefore critical that they understand
the challenge brought by Friends of targets in line with the Paris Agreement. this rapidly evolving landscape and
the Earth in relation to the planned While not all resolutions have obtained manage their environmental impact and
extension of Heathrow Airport. In the required majority, the influence climate change commitments.
February 2020, the Court of Appeal ruled that can be exerted by shareholders
that Heathrow’s expansion plan was should not be underestimated, as it has White & Case is an international law
unlawful as the UK government’s policy been revealed that some shareholders firm that serves companies, governments
statement, which approved the plans to are now also opting to vote against the and financial institutions. For more
build a third runway at Heathrow, had reelection of directors of companies information, visit www.whitecase.com

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