The continuing rise of Consumer Litigation in the EU - Trend 2: The rise of ESG claims

Trend 2: The rise of ESG claims

In Part 2 of our mini-series looking at the continuing rise of Consumer Litigation in the EU we explore the rise of ESG claims. We consider recent ESG claims and their importance on the litigation landscape today and then look at how this will impact businesses in the coming years. Understanding these shifts is essential for businesses seeking to effectively address legal matters and cultivate lasting consumer trust.

What types of claims have we seen to date?

When it comes to climate-related litigation in the EU, we have seen numerous recent successful cases which were directed at governments, for example Neubauer, et al. v. Germany (2021) and Urgenda Foundation v the State of the Netherlands (2019). In the Neubauer case, the Federal Constitutional Court found that state obligations to protect the climate are not only concerned with environmental protection but also the burdens spread out between different (and future) generations (Federal Constitutional Court of Germany, Judgment of 24 March 2021, 1 BvR 2656/18). In the latter decision, the Dutch Supreme Court ruled in favour of the Urgenda Foundation, finding that the Dutch government must reduce emissions immediately in line with its human rights obligations (Dutch Supreme Court (Hoge Raad), Judgment of 20 December 2019, No. 19/00135, ECLI:NL:HR:2019:2006). These successes, and specifically the sympathy displayed by judges in different European jurisdictions when it concerns the protection from climate change as a fundamental right, has encouraged non-governmental organizations and other representative groups to focus their attention on businesses they consider to be contributors to climate change.

As expected, among the first companies to be targeted by this effort were those in the energy sector, the stand-out cases here being Milieudefensie et al. v Royal Dutch Shell as well as ClientEarth’s lawsuit against BP for misleading advertising. However, litigation is increasingly spreading beyond the energy industry, and we are seeing more claims being brought against banks, automotive groups, pension funds, retail groups, and chemical groups.

This year in France, three climate activist groups brought claims against BNP Paribas, one of Europe’s biggest banks, alleging that their loans to big oil and gas companies breach their legal duty to not harm the environment. Meanwhile in Germany, automotive manufacturers are facing claims that the greenhouse gas emissions produced by…