For several decades, individuals and communities affected by climate change – as well as the lawyers, advocates and civil society organizations who represent them – have been using litigation as a strategic tool to hold corporations accountable for climate change-related human rights harms. Traditionally, these lawsuits were brought against governments. However, and as we demonstrated in our 2018 Annual Briefing, Turning up the heat: Corporate legal accountability for climate change, companies are increasingly becoming the direct targets of litigation.

What is more, the “usual suspects” are no longer the only drivers of action. Institutional and private shareholders are increasingly bringing legal claims against the companies or private institutions in which they own shares (so-called shareholder litigation). Shareholders are therefore emerging as an important group of advocates in the fight against corporate impunity for climate-related harm (see our most recent Legal Briefing on Climate Litigation for further details).

The world’s first shareholder-led lawsuit over alleged failure to adequately disclose climate risk was filed against Exxon Mobil Corporation (Exxon) in 2016. This class action was initiated by a group of US investors who sought damages from Exxon after its stock price fell by 13% that year. Plaintiffs argued that the company had made false and misleading statements relating to the impact of climate change on its business, thus substantially overstating the value of its oil reserves, and artificially inflating the company’s value. While the case was later dismissed, it paved the way for what seems to be a lively trend of federal class action litigation in the US...