Poland: ClientEarth wins shareholder lawsuit against Enea in landmark climate risk case
The District Court in Poznań ruled that the decision by Polish energy company Enea SA to participate in the construction of a power plant in north-eastern Poland was legally invalid.
The lawsuit was brought by one of the company’s shareholders, environmental group ClientEarth, who argued that the construction of the country’s last coal-fired power plant would harm the company’s economic interests and pose an “indefensible” financial risk to investors in the face of rising carbon and falling renewables prices.
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"Court win in world-first climate risk case puts future of Ostrołęka C coal plant in question," 1 Aug 2019
The future of Poland’s ‘last coal plant’, Ostrołęka C, hangs in the balance following a court ruling.
The District Court in Poznań held that the company resolution authorising construction of the €1.2bn, 1GW coal-fired power plant, a joint venture between two Polish energy companies, Enea and Energa, was legally invalid. This should prompt a major rethink by the companies and their boards, and could spell the end for the costly project, which still lacks over PLN 3 billion in necessary financing.
ClientEarth lawyer Peter Barnett said: “This is an excellent result for Enea’s shareholders and for the climate. The plant is a stranded asset in the making, facing clear and well-documented financial risks.
“Companies and their directors are legally responsible for managing climate-related risks and face potential liability if they fail to do so. Enea and Energa should lay this project to rest before it incurs any further costs to the companies and their shareholders.”
A Polish district court has ruled as invalid last year’s decision by state-run utility Enea (ENAE.WA) to join a project to build a 1 gigawatt (GW) coal-fueled power plant in cooperation with peer Energa (ENGP.WA), Enea said on Thursday. (...)
Shares in Enea and Energa were more than 2% higher by 1032 GMT.
“This is a clear signal and major opportunity for the companies and for the industry at large,” said Marcin Stoczkiewicz, the head of ClientEarth Poland.
“Enea and Energa need to look at what the future of energy is in Poland. There is vast employment potential in cheaper, domestic renewables.”
Author: Maysa Zorob & Antonella Angelini, Business & Human Rights Resource Centre
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. (...)
Unlike strategic lawsuits which attempt to attribute climate change impacts to specific companies, shareholder litigation is essentially about the assessment of climate change related financial risk. (...)
Shareholder litigation is a compelling strategy for climate accountability – one that pressures companies to pay heed to omnipresent demands to adequately address their climate impacts, including by their own shareholders.