Climate change disputes rely on new theories
Lawsuits focused on human rights, corporate disclosures and fraud may herald new trends in litigation against oil & gas companies
A growing number of climate change disputes have rested on novel legal theories. While past causes of action—including public nuisance, failure to warn, and breaches of environmental laws and regulations—have led to few significant findings against oil & gas companies, recent cases may raise new challenges for the sector.
Around the world, human rights-based arguments have increased in climate change disputes. In a landmark 2019 case, the environmental group Urgenda Foundation successfully argued that the Dutch government had to set a higher emissions reduction target. The court based its decision on the rights of individuals under the European Convention on Human Rights.
Oil & gas companies are also facing human rights claims linked to climate change. For example in 2019, the Commission on Human Rights of the Philippines determined that 47 major fossil fuel companies could be found liable for human rights harms resulting from climate change.
Disclosure and fraud
Shareholders, government officials and the public are targeting alleged failures to disclose climate change-related risks. In one high-profile case, New York’s attorney general alleged ExxonMobil fraudulently deceived investors by providing misleading statements about its climate change risk management. ExxonMobil prevailed following a December 2019 hearing, but similar cases are pending, including one brought by the Massachusetts attorney general against ExxonMobil.
Litigants are also challenging allegedly deceptive marketing campaigns by oil & gas companies, bringing claims to courts and non-judicial bodies. In one case, the UK’s Advertising Standards Agency warned Norwegian energy company Equinor that its marketing could not imply that gas is a “low-carbon energy” source.
It is too soon to tell whether these claims portend a wave of findings against companies for climate change-related harms or their corporate actions. Still, the unprecedented success of the Urgenda Foundation claimants has no doubt influenced the framing of climate change-related disputes, motivating claimants to employ a rights-based approach.