"No one is ready for the rising tide of climate litigation", 26 May 2022 [subscription required]

...The Bank of England used its inaugural “climate stress test” to highlight one black spot: the potential exposure of the insurance sector. Despite a doubling of climate litigation cases globally since 2015, the regulator suggested that no one had closely considered this before and, indeed, “several insurers struggled to collate and aggregate the information necessary for a robust assessment of potential exposures”.

Different cases, around direct or indirect contributions to climate change, greenwashing, breaches of fiduciary duties and more, could affect different insurance products in different ways. Cases may aim to change behaviour, as with Shell, or establish responsibility rather than collect damages. But the distinction is becoming more blurred, according to legal experts, and the former can lay the basis for the latter...

Rising litigation risk is a reality for companies, whether they realise it or not. Sue Garrard, a sustainability consultant and former Unilever executive, argues that the current gap between corporate commitments on climate change and action is huge: “But most companies aren’t thinking about litigation as a significant issue, despite the fact that the basis for lawsuits is shifting and broadening as people understand more about climate risks.”...

Greater focus on greenwashing, including from regulators on both sides of the Atlantic, is part of this: “all sectors are engaging in greenwashing at the moment” is the verdict of Sophie Marjanac from ClientEarth. As there is greater consensus and understanding around other environmental harms, that could unleash litigation...