Climate litigation cases to rise this year – Clyde & Co

Insurance law firm Clyde & Co has delved into the latest climate litigation trends in Australia and shared its predictions for 2023, with cases expected to be on an upward trajectory.

In its APAC insurance predictions report, Clyde & Co noted that Australia has one of the highest numbers of climate litigation cases globally – and the numbers will skyrocket this year.

Key climate litigations in Australia

Among the most notable recent climate litigations in Australia is the Australian Securities and Investments Commission’s (ASIC) decision to issue its first greenwashing fine to Tlou Energy in October 2022 and three infringement notices to investment manager Vanguard Investments Australia in further action against alleged greenwashing.

Meanwhile, the Australasian Centre for Corporate Responsibility (ACCR) has begun proceedings against global energy company Santos over alleged false and misleading claims about producing clean energy. The Australian Competition and Consumer Commission (ACCC) has also taken steps to address greenwashing.

Clyde & Co’s climate litigation predictions

In its report, Clyde & Co said it expects to see a rise in litigation raised by shareholders and activists over greenwashing and ESG commitments made by companies.

“It is increasingly a high-risk area for directors and officers if there is failure to disclose or meet disclosure obligations,” the report said.

Clyde & Co’s other predictions include the following:

Challenges to corporate governance by shareholder actions for failure to consider and address climate risk, with less focus on monetary compensation but rather litigation towards regulation or accountability of corporations;
Challenges to the validity of approvals for fossil fuel projects such as Adani’s Carmichael coal mine in Central Queensland; and
Rise in arguments over duty of care obligations.

The insurance law firm also expects construction projects to be approved with contractual climate change obligations in mind. However, they may be liable for negligence regarding a duty of care to address climate change risks.