Report: ‘climatewash’ litigation on the rise

‘Climatewash’ litigation is on the rise, with 26 cases filed in 2022 compared to less than 10 in 2020, a report from the London School of Economics (LSE) found.

The authors of the report, Joana Setzer and Catherine Higham, found most climatewashing cases were filed against corporations accused of exaggerating the climate-friendliness of their operations. An increase in regulations and guidelines from regulatory bodies could lead to further litigation, the authors stated.

One of the potential reasons for the rise in climatewash litigation is that “people are becoming more aware of not only climate, the need for action, but also that potentially, there is greenwashing taking place,” said Setzer, an assistant professorial research fellow at LSE.

This type of litigation also requires less evidence than cases that claim damage, which means it is easier to win, she added.

“You can very easily prove that greenwashing is taking place,” she said.

The report also found that nearly 50% of climate cases had favorable rulings for climate change.

The researchers added just transition litigation as a category this year after realising “that they represent the complexity of climate action”, said Setzer.

Just transition litigations are lawsuits that raise questions about the justice and fairness of climate action measures. It is litigation brought on behalf of people impacted by the transition to a net-zero economy, such as workers and Indigenous communities.

Their research on just transition litigation is new so there is a lack of extensive data, but Setzer expects to see more cases in the future as questions arise about how to put in place climate solutions. So far cases have been concentrated in the northern hemisphere, but she expects more cases in the south, for instance in cases related to communities affected by the extraction of minerals for batteries.

The researchers also found there has been an increase in anti-ESG litigation in the US, which has not been seen in other countries. ESG has come under political scrutiny in the last year by Republicans, with some states passing so-called anti-ESG laws and even criticising the Fed for its “climate activism“. The politicized issue has “raised flags” for other countries looking to expand and require ESG disclosures, Setzer said.

Setzer said she expects to see two main trends or themes in the future: the nexus between climate and biodiversity protection and the financing of activities that create emissions. That means more litigation on the supply chain side and also against banks and financial institutions.

Ultimately though, “litigation is not going to save the world”, and it is just a way to bring more accountability to companies and governments.

“We really need more legislation and more action and, ideally, less litigation,” Setzer said.