Climate activists take to the courts
Climate activists are increasingly taking legal action to hold governments and businesses to account – and scoring victories. Young activists won recent landmark successes when courts ruled against the governments of Australia and Germany, instructing them to do more to protect young people’s futures by acting on climate change. In the Netherlands, a court ordered oil giant Shell to cut its emissions drastically. Alongside legal action, shareholder activism is targeting fossil fuel companies to urge transition to cleaner energies and carbon reduction, and attention is focusing on the decisions made by large investors, notably pension funds. Simultaneous action on multiple fronts offers hope for averting the worst of the climate crisis.
Action on the streets – mass protests and non-violent civil disobedience – has helped push the climate crisis up the public and political agenda. At the same time, in processes like the COP series of climate change summits, including COP26 held in the UK in November, civil society is doing everything we can to advocate for more ambitious commitments from states.
But increasingly, climate campaigners are using a complementary tactic: they are taking to the courts to hold governments and companies to account for their actions – or lack of action. In 2021, legal cases scored some landmark successes.
Another tactic that’s increasingly being used is activism within companies, as campaigners seek seats on company boards to influence their policies and behaviours. Public campaigning often combines with these tactics to push the agenda forward. Civil society is engaging in every way possible to demand climate action and demand that governments and companies do better.
Australia’s government shamed by young activists
As with climate protests, age has proven no barrier to legal action. It was a group of teenage climate activists who embarrassed the government of Australia last July. While the court blocked the young activists’ attempt to prevent the expansion of a coalmining project, it also ruled that in making decisions, Australia’s environment minister has a duty of care to all Australians under 18 to avoid ‘causing personal injury or death… arising from emissions of carbon dioxide into the Earth’s atmosphere’.
At a stroke, the court’s ruling created a legal responsibility for one of the world’s highest per capita greenhouse gas emitters to protect children and young people from climate harm. The judgment has global significance: it’s believed to be the first case anywhere in the world where a court has imposed such responsibility on a state.
The government’s argument that its additional emissions generated by coal expansion would make minimal overall impact on global warming did not hold water; even small increases can cause tipping points. Australia’s actions are not remotely consistent with its Paris Agreement commitment to hold global warming below 1.5 degrees. For Australia’s coal-addicted government – it has no plans to make fresh emissions cuts by 2030 or phase out coal production, but rather is actively expanding extraction – the court’s ruling offered an unwelcome reality check. Little wonder the government immediately appealed.
The October appeal court hearing saw the unedifying spectacle of lawyers for Sussan Ley, Australia’s environment minister, arguing that she has ‘almost no control’ over global greenhouse gas emissions and the danger to children from climate change will essentially be the same regardless of what the minister does.
It’s a rare day when elected politicians tell voters they have no power and what they do doesn’t matter. Australians concerned about the climate crisis may well wonder whether they should vote for someone who believes their actions can make a difference. The young people who brought the case are bemused at the minister’s determination to deny she has a duty of care towards them and her willingness to fight not to protect their rights but to defend fossil fuel companies.
July 9, 2021
Legal action strengthens political ambition in Germany
At the time of writing, Australia’s appeal court decision remains pending. Climate campaigners around the world are watching, hoping the ruling is upheld. But even if it is overturned, they will not despair. The Australian ruling is not the only breakthrough. Around the world, climate lawsuits are pushing back against the inaction of governments and the deep power of the fossil fuel industry. Over a thousand climate lawsuits have been brought since 2015, and 191 new cases were filed between May 2020 and May 2021. Many – research suggests more than half – have proved successful.
In April, Germany’s courts ruled that its law to reduce carbon emissions to net zero by 2050 didn’t go far enough and must be strengthened. The law, passed in 2019, only set out emissions cuts up to 2030. After nine climate activists aged 15 to 24 brought a lawsuit, the court ordered the government to revise the law to set targets beyond 2030. The court ruled that the fundamental liberties of young people are being breached, since failure to make adequate emissions cuts now means they would carry an unreasonable burden of having to reduce emissions drastically in future.
As in Australia, the court’s ruling showed that governments have a responsibility to consider the rights of those who will live with climate harm long after the current generation of politicians has left power. It also demonstrated how climate activists are increasingly making and winning human rights arguments against climate inaction.
Germany’s ruling had an immediate impact. The then-government announced a more ambitious plan to reach net zero by 2045 and cut emissions by 65 per cent by 2030. Germany’s new government, which came to power following the October 2021 election, went even further, committing to phase out coal by 2030 and generate 80 per cent of its power from renewables by that date. Victory in the courts dovetailed with public protest to push political parties to be more ambitious in the election campaign.
Fossil fuel companies in the legal spotlight
Elsewhere lawsuits have focused on the role of fossil fuel companies in driving climate change – and increasingly, the financial firms investing in them. In 2019 the Dutch supreme court upheld a ruling that the government must cut emissions to protect its citizens’ human rights from climate change. In 2021 in the Netherlands, it was the private sector’s turn to lose in the courts.
In a landmark ruling last May, Shell was ordered to cut its carbon dioxide emissions by 45 per cent by 2030. The case was brought by several environmental civil society groups, led by Friends of the Earth.
This was a monumental verdict. Shell, jointly headquartered in the Netherlands and the UK, is one of the world’s biggest oil companies. The court established a precedent by ruling that Shell is legally obliged to comply with the Paris Agreement. It ruled that Shell has an obligation not only to reduce its own emissions, but also to make its best efforts to cut emissions throughout its value chain, including its consumers and suppliers.
The lawsuit was one of many currently being brought to compel governments and companies to comply with the Paris Agreement – showing the value of international treaties in setting standards and giving civil society scope for advocacy.
Shell instantly said it would appeal, while offering the misleading greenwash routinely proffered by fossil fuel companies that continue to develop new extraction sites. Shell is also claiming it will reduce emissions from its operations by 50 per cent by 2030, a promise that dodges the court’s directions to reduce the bulk of the emissions it is responsible for, which come from the products used by those it supplies.
This wasn’t even the first case lost by Shell in the Dutch courts recently: in January 2021, a Dutch court of appeal ruled its Nigerian subsidiary should pay compensation to farmers affected by oil spills, a verdict the oil giant said it was ‘disappointed’ with; it’s unlikely this story will appear in its next glossy PR campaign.
In what may well be a reaction to these successive legal defeats, in November, Shell announced it would relocate its headquarters and tax residence to the UK, something that could shelter it from further actions in the Dutch courts. The UK’s extensive climate justice movement can, however, be expected to keep up the pressure.
Shareholders pile pressure on fossil fuel giants
Shell is also among the fossil fuel companies facing action from groups of their own shareholders. Shareholder groups are increasingly showing concern about the business risks to companies dependent on future fossil fuel extraction, and making a business case for the opportunities of cleaner energies and transition technologies. Some shareholder groups realise there’s little future in fossil fuels but a potential return the alternatives.
The Third Point hedge fund, having built up a significant stake in Shell, wants to break the company up, into a legacy fossil fuel firm and a cleaner energy company that makes profits by investing in renewables and carbon reduction technologies.
They are not alone. In May an activist hedge fund won two seats on the board of Exxon, arguing that the oil giant was failing to adjust its business strategy in the face of climate change, and was not capitalising on the value it could achieve through alternatives. Interestingly, Exxon’s shares went up not down following this move.
That same month, on the very same day as Shell’s Dutch court verdict, Chevron’s shareholders voted 61 per cent in favour of a resolution to cut the emissions generated by its products; the board had asked shareholders to reject the resolution.
Moves such as this are a long way from the climate justice that many activists are calling for. In many cases they are about shareholder groups pursuing self-interest. But they could be an important part of the response that is needed.
Increasingly climate activists are also campaigning to win seats on boards; even if their efforts are unsuccessful, they use campaigns to highlight their issues and draw attention to the climate harm caused by companies.
That was the case with 18-year-old Ashjayeen Sharif, who in 2021 campaigned for a seat on the board of coal giant AGL, Australia’s biggest climate polluter. Sharif, who first became involved in the school strike movement, campaigned on a ticket of making the company switch to 100 per cent renewable energy by 2030. While he did not win a seat on the board, Sharif’s campaign helped shed a spotlight on the company’s lack of action to mitigate climate harm and added to the momentum that saw shareholders pass a non-binding resolution at its September 2021 meeting for the company to outline plans to reduce emissions and link executive pay to the achievement of these goals.
Pension funds getting in on the act
While some are attempting to influence the direction of companies and move them towards cleaner energies by investment and shareholder action, others are pushing for divestment, urging investors to give up on fossil fuel companies and switch investments towards alternatives.
When it comes to divestment, attention is increasingly focusing on the choices made by big pension funds. They are huge investors in which many people have a stake, but they often make opaque decisions.
The Exxon changes in May had some pension fund backing. And once again headlines were made in the Netherlands. Last October, one of the world’s biggest pension funds, ABP, said it would sell all its holdings in fossil fuel companies, worth around US$17 billion. It was facing legal action over these holdings, and only a few months before had said it had no plans to divest.
It is not alone. The month before, Canada’s second-largest pension fund, CDPQ, announced it would divest of all its oil investments by the end of 2022. It had also been under pressure from campaigners to do so.
Any such funds that continue to invest in the lethal business of fossil fuels can expect to face similar sustained pressure. They can expect to be held to account and pushed to move their money towards the right side of history. Increasingly, there is both a social justice case and a business case for this. When ABP announced its divestment, it made the point that it did not expect its returns to be harmed. There are no longer compelling financial reasons to invest in fossil fuels.
Action on all fronts
Still more action is needed. The examples of climate litigation given above are just a few of many, but while litigation is growing in the global south, historically many of the efforts have been focused in the global north, and particularly the USA. There are still relatively few cases in Africa, Asia and the Pacific Islands, even though these regions are on the frontline of climate impacts. There is a need to take the fight into every courtroom and put legal pressure on companies and states in every part of the world to force them adjust their actions to the scale of the crisis.
Legal action is of course often slow and expensive and demands specialised skills. There is a need for much more support, including pro bono work from legal firms. There is also a need to defend and support the often young campaigners who are leading these struggles and who risk burnout and receive backlash.
Given the pivotal role pension funds play, many more pension holders need to be challenged to question how the money they set aside for their futures each month is being invested. They need to be motivated and enabled to switch to funds that support climate transition. Pension funds that don’t should expect to face sustained campaigning.
In the face of the climate crisis, some unusual alliances may be needed. Climate campaigners and hedge funds are not natural bedfellows. But given the role funds can play as activist investors, there is a need to engage them and make arguments where financial self-interest and climate action coincide. Doing so isn’t a substitute for demanding social justice through mass mobilisation. But all tactics need to be pursued simultaneously to respond to the truly existential threat we all face.
OUR CALLS FOR ACTION
Climate campaigns should support climate litigation in global south countries, including by sharing capacities and mobilising pro bono support from experienced climate litigators.
Civil society should apply concerted pressure on pension funds and other investors to divest from fossil fuels and instead invest in cleaner energies and climate transition.
Private sector investors should commit significantly more funding to cleaner energies and climate transition and put pressure on fossil fuel companies to follow suit.
Cover photo by Kentaro Takahashi/Bloomberg via Getty Images