ESG litigation is on the rise. Stakeholder groups are using litigation – and the threat thereof – to impact an organisation’s ESG strategy and communications.
There have been a number of successes, notably related to the subject of climate change (e.g. the case against Royal Dutch Shell in first instance). At the same time, investors, regulators and society are closely scrutinising organisations’ sustainability policy and targets, and are monitoring the action they undertake – or fail to undertake – to achieve these targets.
Stakeholder groups increasingly use litigation – and the threat thereof – to impact an organisation’s ESG strategy and communications. At the same time, investors, regulators and society are closely scrutinising organisations’ sustainability policy and targets as well as the action they undertake – or fail to undertake – to achieve these targets. Against this background, it is important for clients to understand their liability and litigation risks and to ensure that their strategy and documentation are up to standard. This does not only pertain to business lines that have an apparent impact on our environment but applies in general and in respect of specific projects or relationships.
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Litigation risks posed by greenwashing are on the rise, focussing on parties that may fail to take action to mitigate climate change. The Taxonomy Regulation, the MiFID II framework and other transparency regulations play an important role in this. Banks and investments firms must integrate ESG-related preferences in their services to their clients, while being able to rely on the information published by their target investment companies. The proposed Consumer Empowerment Directive and the Green Claims Directive further underline that meeting ESG is definitively moving from the reputational and stakeholder management area to legal.
Our team of experts can: