In this month's ESG Matters, we take a special look at the Belgian Klimaatzaak, a ruling that underlines the increasing pressure on both governments and companies to 'do their part' to mitigate climate change. Our monthly Spotlight section brings you up to date with the latest developments in ESG governance, disclosure, financial regulation and litigation.

The end of 2023 saw a landmark ruling in ESG litigation. In the Belgian climate case (Klimaatzaak), the Brussels Court of Appeal recently imposed a 55% emissions reduction order for 2030 on three Belgian governments. It is the most ambitious emissions reduction order imposed on a government by a standing judgment. While the judgment may still be overturned in cassation, the Court’s extensive and partly novel reasoning is relevant to future climate litigation against both governments and corporates.

The judgment: a new development in climate litigation
In short, the Court ruled that the Belgian Federal Government, the Brussels Metropolitan Region and the Flemish Region failed to ‘do their part’ in the reduction of global greenhouse gas emissions. In doing so, the governments violated Articles 2 (right to life) and 8 (right to family life) of the European Convention on Human Rights (ECHR), as well as their duty of care based on Belgian tort law. As a relief, the Court ordered the governments to reduce Belgian greenhouse gas emissions by 55% by 2030 compared with 1990. The claim against the Walloon Region was dismissed, as it had achieved a 40% reduction in emissions in 2020 and was taking measures to implement the 55% reduction target.

A step further than Urgenda: at least 55% reduction required by 2030
The Court’s reasoning that underpins the 55% reduction order is strongly influenced by the reasoning of the Dutch Supreme Court in the Urgenda climate case. The Court initiates by stating that Articles 2 and 8 ECHR require the governments to take the minimally required measures to do their part in preventing the crossing of a dangerous climate threshold for the right to life and private life of their citizens. Based on scientific and (international) political consensus, the Court establishes this dangerous threshold at 1.5°C.

The Belgian Court goes further than the Dutch Supreme Court in Urgenda by setting the most ambitious emission reduction order imposed on a government by a standing judgment. The claimants asked for a reduction order of 61% by 2030, which would align with a 2/3 probability of limiting global warming to 1.5°C. The Court rejected this claim, because there is political leeway in determining what probability of limiting global warming to 1.5°C is acceptable. Because of this, the Court cannot establish that 61% is the minimum target required to comply with Articles 2 and 8 ECHR.

However, the Court considers, based on European climate laws, that there is political consensus that EU Member States should reduce their greenhouse gas emissions by at least 55% by 2030 in order to avoid dangerous global warming. The Belgian State has also bound itself to this reduction target by the Government’s coalition agreement of 30 September 2020. On these grounds and taking into account the best available climate science, the Court finds that Articles 2 and 8 of the ECHR require the Belgian governments to reduce Belgian emissions by at least 55% by 2030 and orders them to do so. It is left to the governments to choose the (legislative) means to achieve this target.

The binding reduction targets for EU Member States are pivotal in establishing the 55% reduction target for the Belgian governments. As such, the judgment shows how increasingly binding climate legislation, against the backdrop of the increasing human rights and environmental impacts of climate change, will increasingly provide new grounds for climate litigation in the years to come. The question remains whether a reasoning similar to the one developed in the Court's judgment could be developed to impose a fixed emissions reduction goal on private actors.

Penalty payments
The claimants also requested that the governments be subject to periodic penalty payments of EUR 1 million for each month of non-compliance with the Court’s injunction as of 1 August 2031. NGO Klimaatzaak stated that it would spend any penalty payments received in accordance with its statutory goals. The Court confirmed that it could indeed impose periodic penalty payments on the defendant governments for the benefit of NGO Klimaatzaak in order to induce them to comply with the Court’s injunction, as long as the governments remain free to choose the measures to achieve the ordered result.

While the Court saw no reason to impose penalty payments at this stage, it suspended the decision on this matter and ordered the governments to provide the Court in due course with their EC emissions reports for the years 2022 to 2024 and the latest version of their national energy-climate plan. After receiving these documents, the Court will decide whether it will impose penalty payments. If it intends to do so, the Court will have to address several fundamental questions, including on the democratic legitimacy of an NGO receiving and spending large sums of state funds.

What this means for you:

  • Key scientific and legal emissions reduction deadlines are approaching and the consequences of climate change are materialising. In light of these circumstances, courts around the world appear increasingly willing to force governments to ‘do their part’ to avoid dangerous climate change.
  • Rulings such as the one in the Belgian Klimaatzaak can accelerate legislative processes and lead to firm legislative requirements being imposed on companies and organisations in the relevant jurisdictions. The indirect impact on corporations is apparent and important to be prepared for.

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