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Businesses that don’t take climate seriously ‘will find themselves increasingly exposed to claims’
Ahead of the looming International Court of Justice advisory opinion on climate change, Australian corporations will need to make appropriate assessments and adjustments to the way they carry out business.
Jerome Doraisamy
Early last year, the United Nations General Assembly requested that the International Court of Justice (ICJ) provide an advisory opinion on the obligations of states under international law to protect the climate system from the adverse effects of anthropogenic greenhouse gas emissions for states and for present and future generations, as well as consider the legal consequences for states that have caused significant harm to the climate.
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Ahead of the delivery of the opinion, global law firm DLA Piper has advised the governments of the Democratic Republic of Timor-Leste, the Kingdom of Tonga, and Solomon Islands pro bono in preparing their first written statements.
Speaking following the provision of advice to the three small island states, DLA Piper partner Stephen Webb (pictured) said the ICJ opinion “is the most significant climate legal proceedings to date and will set a new bar as to what states’ obligations are to protect the environment from the impacts of climate change”.
In conversation with Lawyers Weekly, Webb noted the ICJ opinion – likely to be issued in 2025, he said – will create significantly greater certainty around the extent of obligations of countries, under international law, when it comes to climate change.
“That greater certainty will also influence and guide domestic courts around the world and invariably lead to a new surge in climate-related litigation, including against companies, and will likely assist the prospects of claimants,” he explained.
When asked what law departments can and must do to better support their businesses moving forward, Webb mused that the prevalence of climate-related litigation is increasing globally and is often used as a tactic to achieve delays on planned projects or to increase pressure on companies and boards to do more to protect the climate.
“The ICJ matter, along with other similar matters also currently underway, including the ITLOS advisory opinion heard in Hamburg in September 2023, are considered by many climate legal experts to provide a stronger platform for those types of claims to succeed,” he said.
“Many companies are taking climate seriously and making the appropriate assessments and adjustments to the way they carry out business.”
“This will become more universal and be expected by investors. Those that don’t, or are slow to move in this direction, will find themselves increasingly exposed to claims," Webb noted.
Firm partner Gitanjali Bajaj also pointed out that in-house counsel should consider how well informed they are of global developments in the legal climate risk landscape.
"With rapidly emerging law and guidance from international tribunals and courts around the world, businesses need to consider whether their ESG strategies adequately respond to the growing climate related legal risk," she explained.
Being ahead of the curve on climate policy is an ongoing challenge in shifting regulatory landscapes both at a domestic and a global level, Bajaj mused.
"Climate related litigation is now more than a focussed claim (that one can see coming) on a particular corporation to drive it into action, but is also being directed towards the legal framework (whether under international law or domestic law) to drive legislative change that will ultimately impact corporate strategies and responses," she explained.
