With environmental groups taking to courts as never before, the energy transition is boom time for lawyers

6 minute read

Trucks and cars are seen driving past while smoke rises from the Duvha coal-based power station owned by state power utility Eskom, in Emalahleni, in Mpumalanga province, South Africa, June 3, 2021. Picture taken June 3, 2021. REUTERS/Siphiwe Sibeko - RC2SSN9EHOX8

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May 20 - Earlier this month, environmental groups announced plans to sue the Canadian government after it approved the $12 billion Bay du Nord offshore oil project in the Atlantic Ocean.

An environment assessment concluded that the project, which will see a floating platform drill an oil field estimated to hold up to one billion barrels of oil, wouldn’t cause any significant adverse effects.

Equinor, the Norway-based energy company behind the project, claims it will be the lowest carbon intensity oil project in Canada. "We strongly believe that this can be an important project with high value creation, a low carbon footprint and strong economic value for the region," an Equinor spokesperson said.

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But environmental groups, including Sierra Club Canada, said that federal Environment Minister Steven Guilbeault, failed to take into account the international impact of the greenhouse gas emissions the project will generate.

Just a few years ago, such cases were rare, but now litigation is becoming an increasingly important tool when it comes to holding companies and governments to account over their contribution to global warming.

Donald Pols, Director of Milieudefensie (Friends of the Earth), reacts holding a copy of a verdict in a case brought on against Shell by environmentalist and human rights groups, including Greenpeace and Friends of the Earth, who demand the energy firm to cut its reliance on fossil fuels, in The Hague, Netherlands, May 26, 2021. REUTERS/Piroschka van de Wouw

According to the Grantham Institute’s 2021 Global Trends in Climate Change Litigation Policy Report, the number of climate change-related cases has more than doubled since 2015. Between 1986 and 2014, just over 800 cases were filed, but since then a further 1,000 have been brought before the courts.

The impetus for many of these cases came in 2019, when the Dutch sustainable transition non-profit Urgenda won a landmark claim against the government of the Netherlands, successfully arguing that the state was taking insufficient action to address climate change, which was an abnegation of its responsibility to protect human rights.

April Williamson, a lawyer at ClientEarth, an environmental charity that uses the law to fight for system change, says: “When you have positive precedents, it really starts to create a proliferation of cases, and people start to get really excited because there's more of a chance that arguments that have been used in another case can be used again (successfully).”

It has taken time for national laws to be adopted around the Paris Agreement, she says, but now they are “providing new avenues for people to hold governments to account if they aren’t able to meet their climate targets”.

It is not just governments that are in the sights of groups such as ClientEarth. In May last year, the Netherlands was the legal battleground for another landmark ruling, with the courts judging that Shell must cut its emissions by 45% by 2030 against a 2019 baseline, including the emissions associated with the use of its product, known as Scope 3.

Shell’s directors are now appealing, describing the obligation to reduce Scope 3 emissions as “unreasonable”. The company also points to its energy transition strategy, with targets to cut Scopes 1 and 2 emissions, which Shell says are consistent with the 1.5C temperature goal of the Paris Agreement, along with a target to become a net zero emission energy business by 2050.

Chief Financial Officer Jessica Uhl and Chief Executive Officer Ben van Beurden talk before the annual general meeting of Shell in Scheveningen, Netherlands May 21, 2019. REUTERS/Piroschka van de Wouw

In March, ClientEarth took the battle to the UK courts, starting legal action against the company’s 13 executive and non-executive directors. It is the first ever case seeking to hold company directors personally liable for failing to properly prepare for the energy transition.

ClientEarth argues that the board’s failure to adopt and implement a climate strategy that truly aligns with the Paris Agreement is a breach of their duties under the UK Companies Act.

Asked during a media call this month about the law suit, Shell’s CEO Ben van Beurden said the company was “making strong progress” on its energy transition strategy, which had been supported by 89% of its shareholders.

He said few companies could match its commitments to cut scope 1 and 2 emissions by 2030 and reduce the carbon intensity of its operations by 2.5%. “We are well ahead of society to that extent. These targets, we firmly believe, are in line with the Paris Agreement.”

U.S.-based non-profit Earthjustice has been using the courts to challenge fossil fuel projects since 1971, working with frontline organisations and communities that are already being impacted by climate change. But rather than taking on a government’s broader failings to act, it opts to work on individual cases.

The organisation recently celebrated a judgment by the South Africa High Court that recognised poor air quality in the Mpumalanage Highveld region as a breach of residents’ constitutional right to a healthy environment. A Greenpeace study had laid the blame for the toxic air at the feet of the large number of coal-powered power stations in the area.

“It is those project-by-project cases and challenges that have made the difference,” explains international programme director Martin Wagner.

But winning isn’t everything, he adds, and just having their day in court can have an impact. While corporations have always been adept at finding loopholes in laws and regulations, often “slow playing” things to delay and stall proceedings, when it comes to climate change, this can work in favour of groups such as Earthjustice.

“Delaying a carbon-emitting development can mean it never gets built, simply because greener technologies are moving so quickly, that it's no longer necessary. Delay is actually our friend,” he says. “Litigation also draws the attention of the government and the public to the corporation's behaviour,” which can deter potential investors and alert regulators.

“If we are able to shift the minds of government decision makers in a broader way... or if we can shift the public perception so that they are paying attention to what the government is approving... then that's a victory,” he says.

Sami reindeer herder Nils Mathis Sara, 60, drives his ATV as he follows a herd of reindeer on the Finnmark Plateau, Norway, June 16, 2018. REUTERS/Stoyan Nenov

Litigation is also being used to obstruct climate policy. In another high-profile Dutch case in the Grantham Institute report, the Germany-based utility company RWE is suing the Netherlands government for introducing policies that they say haven’t given them enough time or resources to move away from fossil fuels.

While companies face potential reputational damage for making such challenges, they also believe they need to defend themselves and claim the compensation they feel is due, explains the report's co-author Joana Setzer.

In the U.S., the coal-rich state of West Virginia has threatened legal action against the Securities and Exchange Commission’s recent proposals to mandate companies to disclose their climate risk. The state’s Attorney General said this would amount to a “federal regulation compelling speech in violation of the First Amendment” and would “compel costly and unjustified collection and disclosure of information solely to satisfy activists”.

Then there is the growing number of just transition cases covering issues such as, jobs lost as a result of fossil fuel investments being wound down, and the location of wind farms.

Last year, Norway’s supreme court stripped two wind farms of their operating licences after indigenous Sami reindeer herders successfully argued that the sound of the turbines frightened their animals and jeopardised age-old traditions. The decision has put the future of Europe’s biggest wind farm in question, along with Norway’s plans to transition to a green economy. read more

One thing is for certain, this trend towards litigation will only grow. When it comes to jobs in the energy transition, there will be no shortage of opportunities for lawyers.

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Ethical Corporation Magazine, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.

Mark Hillsdon is a Manchester-based freelance writer who writes on business and sustainability for The Ethical Corporation, The Guardian, and a range of nature-based titles.