Crowdfunding climate litigation ‘a real watch item for investors’

Expect to also see a move to more targeted biodiversity litigation


Michael Nelson

The ability to raise money at the grassroots for climate litigation is a factor in its continued rise across the globe, with new methods and areas of focus coming to the fore.

These were some of the topics discussed by panellists at a recent briefing on the increase in climate litigation, hosted by UK Sustainable Investment and Finance Association in London.

The briefing comes after the UN Environment Programme’s Global Climate Litigation Report: 2023 Status Review, which showed that the number of climate change court cases has already more than doubled since 2017. 2,180 cases were filed in 2022, compared with 884 in 2017.

This was backed up by the Grantham Research Institute’s 2023 Global Trends in Climate Litigation Policy Report, which suggests that climate-related litigation is increasingly being used as a tool to hold private and public sector actors to account over their contributions to climate change.

Additionally, the report identified an increase in the number of climate-related cases brought against private sector actors. Of the 190 cases identified in the report, filed between June 2022 and May 2023, around 46% were filed against an increasingly diverse pool of private sector actors, reflecting the growing recognition by prospective litigants of litigation as an effective means of influencing the actions the private sector is taking to address climate change.

Among the panellists at the event was Louise Howard, chief legal officer at Universities Superannuation Scheme, itself subject of a recent lawsuit in the UK over its alleged failure to devise a credible plan to divest from fossil fuels, a case which the pension scheme successfully defended itself against.

“The big shift recently is the convergence of ESG and law, with litigation as one aspect of that alongside increased regulatory burden,” said Howard.

“One of the nuances here, particularly with regards to the case we have just fought, is the rise of crowdfunding. The ability for people to raise significant amounts of money as a grassroots action, with little accountability or requirements in terms of disclosure, and without having to think about litigation funding or traditional securities in other jurisdictions, should be a real watch item for investors.”

The panel also proposed ways in which climate litigation could develop over the next 10 years.

“I expect we will see a move from climate-based litigation to more targeted biodiversity litigation, and the term ‘nature washing’ could come into common parlance,” suggested Sonali Siriwardena, global head of ESG and Simmons & Simmons.

“There will also be innovation in terms of the types of litigation. In the UK, for example, a recent case against Severn Trent is notable for being the first environmental opt-out competition class action against a water company, on behalf of millions of household consumers who may have been overcharged on their water bills.

“These innovative ways and means are being explored by claimants, beneficiaries, consumers and society at large, so corporates need to be much more aware of them going forward.”


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