Category: Law & Justice

Climate change could lead to great wave of legal liability
Acclimatise News

Climate change could lead to great wave of legal liability

By Nadine Coudel and Dr Richard Bater

As climate change and its impacts become increasingly apparent, the legal landscape surrounding our collective response is also evolving at pace. New International law governing the transition to a low-carbon society and responses to climate risk is driving a rapid rise in climate-specific national legislation and policies, and an increasing amount of litigation. For companies, governments and other organisations these developments provide clear impetus to understand, disclose and manage climate risk. Failure to do so will increase exposure to legal liability. So, what is the state of play today with regards to the legal aspects of climate change? And what should the response be?

International climate change law

In response to the global challenge of climate change, states have established an international climate regime whose treaties (the 1992 United Nations Framework Convention on Climate Change, the 1997 Kyoto Protocol and the 2015 Paris Agreement) created a system of climate governance. With the adoption of the latest global legal framework in Paris in December 2015, a post 2020 international climate regime was agreed on by the contracting Parties to the UNFCCC. The Paris Agreement builds upon the Convention and – for the first time – brings all nations into a common cause to undertake efforts to combat climate change and adapt to its adverse impacts. Countries committed to holding the global average temperature rise to well below 2 degrees C, pursue efforts to limit the increase to 1.5 degrees C, and achieve net-zero emissions in the second half of this century. Nationally determined contributions (NDCs) are at the heart of the Paris Agreement and embody efforts by each country to reduce national emissions and adapt to the impacts of climate change in order to achieve these long-term goals. Implementing the Paris Agreement also relies on translating countries’ commitments set out in their NDCs – that is, their post-2020 climate actions – into national laws and policies. Analysis undertaken by the Grantham Research Institute in 2018 demonstrate a lack of consistency between NDC commitments and targets in national climate laws and policies. Any delay in translating NDC commitments in nationally legislated targets potentially limits the effective planning and implementation of policies, reduces the ability to address climate challenges, adapt to climate impacts and avoid costly action at a later stage, and overall reduces the ability to track progress and hold countries accountable for their pledges.

However, the Paris Agreement has and will continue to lead to increasing climate change legislation and litigation as nations grapple with meeting the goals set-out in the agreement.

Legislation

Partly driven by the UNFCCC process, the volume of climate-specific legislation and policies has increased by twenty-fold during the past two decades. According to the Grantham Institute, all 197 signatories of the Paris Agreement have at least one law or policy on climate change. This legislation can be roughly categorised into mitigation-related and adaptation-related legislation. The former sets a country’s low-carbon transition plans in a legal framework (e.g. carbon markets), whilst the latter codifies standards or duties regarding how organisations adapt to the physical impacts of climate change. Laws relating to either may be developed at the national or sub-national levels and can be sector-specific. According to the Columbia University’s Climate Case Law database, by 2018 there had been 1522 climate-related laws and policies enacted globally, of which 489 were related to climate adaptation. A total of 282 laws have come into force since the Paris Agreement, of which 109 are adaptation related.

Laws such as the UK’s Climate Change Act (2008) or France’s Article 173 place duties on Government and/or corporates to advance the transition to a low-carbon economy and managing physical risks to assets or risk latent in portfolios. By placing clear duties and responsibilities on Government in respect of climate change, such law has transversal implications for what activities are permitted to take place and where, ultimately having economy-wide implications. Whilst such legislation can preclude much litigation, such as by clearly establishing ‘reasonable person’ expectations, it can drive litigation where the law is ambiguous or where a state is alleged to have failed to exercise its own duties.

The introduction of climate-related laws, regulation, and policy is dramatically shifting the compliance, disclosure, and due diligence landscape. However, climate law represents only one angle of the implications of climate change for legislation. As Alice Garton has succinctly noted, “It’s not the laws that need to evolve, it’s the understanding [of companies and investors] of how laws apply to new risks”. First, it is increasingly recognised that the management of climate-related risk falls within existing company law in many commonwealth jurisdictions. Likewise, the duties that Directors, fiduciaries, officers, and professionals are under with regard to the responsibilities regarding climate risk are also contained within existing law. In neither case would climate change have been a consideration when laws were drafted, but in both cases law is deliberately flexible in order to accommodate an evolving environment and standards of practice. Second, the physical impacts of climate change can raise implications for compliance with existing laws and regulations across a host of areas, from heath and safety (e.g. worker exposure to heat), the environment (e.g. permissible discharges), construction (e.g. building design) to corporate disclosure (e.g. the Martin Act). In all cases, the physical impacts of a changing climate can give rise to liability risks in connection with existing obligations that may have been considered to be managed.

Developments in hard or soft law continue across jurisdictions also. In the United States, a proposed Climate Change Disclosures Act would require companies to disclose climate risks to assets to the Security and Exchange Commission. In the EU context, there are proposals both to strengthen climate risk disclosure requirements in existing pensions regulations, as groundwork is laid for possible future sustainable finance regulations. At the same time, driven by the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) is leading baking regulators to place increasing pressure on financial institutions to manage and disclose climate-related financial risks.

Litigation

Most climate-related litigation to date, has been brought in the United States, with 761 cases reported by the end of 2017. Of these, 41 cases were connected with climate adaptation. According to the Climate Law Database, by the end of 2018, 280 cases had been brought outside the US, of which 14 related to adaptation; the majority of which was in the U.K.

There has been a marked increase in the volume of climate litigation, notably outside the U.S.

Mis-representation, infringement of rights, mis-sold or faulty goods and services, and failure to prevent harm are all major potential causes for litigation.

The key drivers for climate change litigation are:

1.Climate change as a rights-based issue: cases that where governments fail to act to protect their citizens from the impacts of climate.

Requiring governments or regulators to take action to meet national or international commitments challenging climate change-related legislation and policies, or their application. In Leghariv v. Republic of Pakistan, the plaintiff successfully sued the government on grounds that its failure to adequately implement the country’s National Climate Change Policy offended his fundamental rights.

2. Climate change as a financial issue (raising awareness and exerting pressure on corporate actors, regulators or investors)

  • ‘Failure to mitigate’: cases link the impacts of fossil fuel extraction to climate change and resilience by seeking to establish that a particular organisation’s emissions are the proximate cause of particular adverse climate change impacts. Preventing future emissions and contributions to climate change / industries and municipalities brining litigation against oil firms for causing emissions (e.g. Kivalina v. ExxonMobil Corp.), individuals from an Alaskan island facing extreme erosion and weather events claimed damages from energy companies, claiming the weather patterns were due to climate change which had been caused by the defendant’s actions.), cases in the US by cities and states against oil majors seeking compensation for the costs of adapting to climate change. It has been asserted that ‘failure to prevent’ litigation against public bodies could be most likely to succeed.
  • ‘Failure to adapt’: cases that seek to establish liability for failure take adequate steps to adapt to climate change. Such claims could be brought against engineers, architects and other professional services for breach of their duty of care should they fail to design structures compatible with future climate conditions.
  • ‘Failure to disclose’: Some organisations have shown reticence in disclosing climate risks in their financial reporting, partly for fear of increasing liability risk. However, Sarah Barker and colleagues have argued that such concerns are misplaced, and suggest that disclosing risks in line with, for instance, the TCFD recommendations will in fact reduce corporates’ and directors’ liability exposure. A key test case, settled out of court, was brought by shareholders in the Commonwealth Bank of Australia in 2017, alleging that the Bank failed to disclose material (climate) risks to investors, as is required by Australia’s Corporations Act (2001). Whether driven by new law, the reinterpretation of existing law or the demands asset owners, the onus is increasingly on companies and Directors to properly disclose climate risk.

3. Enforcement of existing legislation: cases that use existing non-climate related legal frameworks to bring climate-related litigation. The range of potential cases in this category is considerable, where businesses fail to manage liabilities associated with existing laws from fiduciary and Directors’ duties to environmental regulations become transgressed owing to failure to adapt business practices to emerging climate-related physical and transition risks. Cases as diverse as ‘Dieselgate’, that uncovered fraudulent diesel emissions claims made by Volkswagen, and Client Earth’s litigation against the British government for its ‘unlawful’ air quality plans represent precedents for how companies or governments could be held liable for false claims (e.g. carbon accounting) or failure to implement climate policy. In jurisdictions that widely apply the precautionary principle – such as the EU – could see litigation that tests how that principle applies to climate-related questions too, including permitting, mitigation plans, and adaptation plans. Indeed, the precautionary principle was referred to in the ground-breaking Urgenda case. In the US, California energy utility PG&E is facing litigation for alleged hazardous negligence and breaching safety rules, whilst both the New York ‘Martin Act’ and consumer protection law has been invoked in litigation brought against ExxonMobil. Moreover, in some jurisdictions legislation litigation can itself precipitate policy. For example, the ‘Endangerment Finding’ in the United States, in which greenhouse gases were ruled harmful pollutants under the Clean Air Act, became a key enabler of the Clean Power Plan.

Looking ahead – reducing legal liabilities in a changing climate

Uncertainty about the future climate is not a reason for inaction. In fact, trends are already becoming apparent fundamentally affect the strategic context that businesses will operate in during the coming years. These trends are manifold, and include the domino effect of actions to meet the objectives set-out in the Paris Agreement, which establishes a clear trajectory for how expectations for corporate action, investor diligence on climate-related risks, and the role of state and local authorities with respect to climate mitigation and adaptation will evolve. In broad terms, changing expectations and laws will catalyse shifts in the sectors and activities that are encouraged (or discouraged), and lead to new standards and duties. A changing regulatory landscape, and the effects it has on potential climate change litigation, is already forcing businesses to update their resiliency plans. In addition, judges are dealing more and more with climate-related arguments and facts that were previously not presented before courts.

There has also been progress in climate attribution science to further understand causal links between elements of the earth system and society. Scientific findings make it possible to attribute some extreme events to human-induced climate change. Scientific advances already allow loss and damage associated with such events to be assigned country-level responsibility. Attribution science is often associated with foreseeability and responsibility, and therefore linked to discussions about liability and compensation.Hence,it is conceivable that attribution of climate change to particular ‘wrongdoers’ – such as polluters or emitters – could be placed on the agenda of the international climate regime. Given the influence of climate-related hazards on displacement, this may also further stimulate the debate on rights and duties in respect to climate-induced migration.

Whereas much climate-related litigation has centred on assessments and permits as well as emissions, with public bodies often the defendant. However, the variety of litigation and defendants is broadening, and beginning to affect corporates too. ‘Failure to disclose’, ‘false or misleading disclosure’ (e.g shareholder-led) and ‘failure to adapt’, represent types of litigation likely to be tested in the coming years, particularly until clear legal precedents are set. With increasing documentation of physical impacts of climate change, third-party funded class action suits could finance previously out-of-reach scientific evidence in cases brought by those that experience preventable harm.

Scientific development is accompanied by an increasing demand for ‘climate services’, that translate the existing wealth of climate data and information into customised tools, products and information in order to understand, manage, and communicate climate-related risks. Thus climate-related scenario analysis will play an increasingly important role with respect to disclosing forward-looking information and potential climate-related risks in order to avoid claims for misleading or fraudulent disclosures. Company directors not only need to be aware of their firms’ contribution to climate change but disclose their potential climate risks in a robust and transparent fashion.

Learn more about Acclimatise’s work on climate risk disclosure here.

Cover photo by Patrick Fore on Unsplash.
Embracing uncertainty: How disclosing uncertain information on climate risk can reduce legal liability exposure
Will Bugler

Embracing uncertainty: How disclosing uncertain information on climate risk can reduce legal liability exposure

By Marcela Scarpellini, right. based on science UG

As climate related damages increase, the need to allocate funds and apportion blame will inevitably follow. In this context, the mechanisms used for determining responsibility are likely to become, to say the least, very creative.

Pressure for proactive climate action and better response is mounting thanks to legislation and regulation, litigation, shareholder demands, citizens calling for more action, carbon taxes and concrete mitigation and adaptation plans.

The status and intent of current regulations relating to climate change and the legal infrastructure that is expected to support or deter the transition to a low carbon economy, provide a good indication of the stringency and certainty of the measures that will follow.

After Bank of England Governor Mark Carney’s famous warning in his 2015 speech regarding the threat climate change posed to our financial systems, financial institutions and governments started to wake up to the issue. This meant paying attention to – and developing an understanding of – how climate risks might play out and affect businesses future profitability and the stability of the wider financial system. In response, the G20’s Financial Stability Board established the Task Force on Climate-Related Disclosures (TCFD).

Point in time: Disclosure

The TCFD‘s purpose is to provide corporates and financial institutions with a framework for climate risk disclosure in two key respects. First, with regard to the analysis of the physical and transition risks and opportunities they may face due to climate change. Second, with regard to the development of appropriate strategies to respond to the consequences of those risks materialising.

This initiative, which already has 513 official supporters across businesses, advisory firms, and financial institutions, is a voluntary framework. The main political intention behind it – in combination with the EU Directive on Non-Financial Disclosures, EU Shareholders Directive and other upcoming EU financial regulation – is to foster transparency by requiring corporates and financial institutions to disclose information on material impacts of the physical and policy risks (transition risks) connected with climate change.

The TCFD recommendations are just a first step. Increasing transparency is a means to an end, not an end in itself: boilerplate and vague disclosures will not cut it. The intention of climate risk disclosures is to provide legislators with a broad understanding of the current state of investments and business bets into a certain world, in order to come up with evidence-based legislation that actually has a chance of reshaping our economies.

In this context, corporates and financial institutions have started to work out the best ways to generate relevant disclosures. The first attempts to generate this information using the TCFD framework have been released, but there is still a long way to go.

Hot topic: scenario analysis

One of the challenges of applying the TCFD framework has been the use of scenario analysis. Scenario-analyses are forward-looking tools intended to allow users to imagine how a range of possible futures could look, the risks and opportunities entailed in those different futures and get its users to pin down how their companies would be affected if any of those futures materialized. The overarching purpose is to enable firms to develop strategic and resilient business plans to incorporate envisioned or possible changes.

A concrete way in which companies make use of scenario analyses is by using them to understand how their capital requirements might be impacted under a range of plausible scenarios. Using scenario analyses, companies can peer into the future and build resilient responses to a world in which extreme events and their financial impacts are no longer sporadic but recurrent.

Scenario analysis is a time and capacity consuming challenge. Despite this, many companies, particularly within the oil & gas sector, have been using these tools for some time, and companies in other sectors are starting to do so too.

Another significant hurdle for companies performing scenario analysis stems from having to disclose the information generated. Many businesses are wary of this since, it is suggested, the information generated by scenario analysis is just hypothetical, which could, in turn, be misconstrued as a fraudulent, deceptive or incorrect disclosure, potentially opening the door to liability exposure. However, in reality, this constitutes a narrow view of the story.

Understanding risk

Properly understood, scenario-analysis is a risk assessment tool, so the information derived from it is the same in nature as information relating to other risks that might affect a company. Risks are hypothetical by nature and gain validity when substantiated through evidence and justification.

What it takes to reduce disclosure-related liabilities is a thorough and well-presented substantiation of the information provided, with clear and precautionary wording regarding how this information ought to be interpreted and construed.

A stream of forward-looking legal experts, within the Commonwealth Climate and Law Initiative, are of the opinion that disclosing forward-looking information in line with the TCFD Recommendations might, on the contrary, reduce liability exposure. Their claim is justified by understanding the core intentions of the TCFD’s recommendations, namely transparency and accountability. Therefore, firms able to demonstrate that they are acting to understand and manage climate risk will be acknowledged for that in the light of corporate responsibilities such as due diligence and good corporate governance. In understanding the purpose of disclosure, firms are allowed to make mistakes, though they are not allowed to be fraudulent, deceptive and manipulative about the future in order to ensure certain business interests.

As more firms get on board with the TCFD recommendations, using them as guidelines for disclosure, it is likely that they become reference points and that national laws start to be interpreted in light of the most advanced practices. In jurisdictions such as the UK, where an objective test applies to determine the extent and manner in which directors have exercised their duty of care and due diligence, this determination is likely to be done on the basis of what others in the industry are doing. If and when TCFD becomes best-practice, this is likely to become the yardstick against which these determinations will be made[1].

Good practice to reduce liability

Scenario-analysis remains a beneficial tool, despite the fact that it is still becoming an established best practice and mandated by law. To reduce firms’ concerns around liability associated with scenario-analysis, and to encourage them to start using it and disclosing climate risk information prudently, a series of recommendations follows:

  • Use proper cautionary language.
  • Use a variety of scenarios, at least three would be advisable.
  • Place all scenarios within the same section and under the same fonts in your disclosure as to avoid that any be interpreted as being favoured.
  • Use multiple sources for data and narratives and seek insights from new sources.
  • Use current data and justify your choice of providers.
  • Ensure your scenarios reflect the variance (climate, political, social, regulatory) and are relevant to the entirety of the company´s operations.
  • Use information derived from scenarios in order to justify likelihood and not infallible certainty.
  • Not disclosing any forward-looking information under the false pretence that it might make your company liable is a greater risk than disclosing uncertain information.
  • If you are not sure of how to go about it, hire consulting services to guide you along the way.

Further reading:

https://www.right-basedonscience.de/2017/08/04/better-safe-than-sorry/

Marcela Scarpellini studied law at the Universidad Católica Andrés Bello in Caracas (Venezuela) and has an LL.M. from the University of Stockholm (Sweden) in the field of environmental law. Within right.based on science (“right.”) she works at providing the legal context upon which right.´s X-Degree Compatibility (“XDC”) model and other metrics are developed.

right. based on science is a data provider founded in August 2016, which measures a single economic entity’s contribution, be that of e.g. a company or a lending project, to manmade climate change. With a team of experts with backgrounds in law, science, economics, psychology and mathematics, right. is devoted to the development of the XDC Model, which calculates science-based climate metrics on the basis of latest climate research and regulatory requirements, in order to deduct an entity’s X-Degree Compatibility.

[1] Concerns misplaced: Will compliance with the TCFD recommendations really expose companies and directors to liability risk? Alexia Staker, Alice Garton & Sarah Barker. Commonwealth and climate law initiative.

Photo by Krissana Porto on Unsplash

US Senators introduce ‘Climate Security Act’ to understand climate impact on national security
Acclimatise News

US Senators introduce ‘Climate Security Act’ to understand climate impact on national security

By Will Bugler

Senators on the Senate Foreign Relations Committee have introduced a bill designed to increase the U.S governments’ understanding of the relationship between climate change and national Security. Brought forward on the 12th of March, The Climate Security Act of 2019 is wide ranging, examining the economic, environmental, and geopolitical impacts fuelled by climate change.

The Climate Security Act of 2019 was cosponsored by Senators Ben Cardin (D-Md.); Jeanne Shaheen (D-N.H.); Chris Coons (D-Del.); Tom Udall (D-N.M.); Chris Murphy (D-Conn.); Tim Kaine (D-Va.); Ed Markey (D-Mass.); Jeff Merkley (D-Ore.); Cory Booker (D-N.J.); and Brian Schatz (D-Hawaii).

If adopted, the Act would create a new Climate Security Envoy within the Department of State. The role would address climate security vulnerabilities and serve as the primary federal contact for climate security issues. The Climate Security Envoy would:

  • Work with climate scientists and security professionals to conduct analysis and risk assessments of the socioeconomic, geopolitical, and security risks associated with climate change.
  • Design climate security policies derived from those findings.
  • Develop and coordinate the application of climate security strategies that integrate climate policy seamlessly within the Department of State and across U.S. Embassies.
  • Develop and maintain relationships with other nations to address international climate security issues.

The Climate Security Envoy would also advise the President of the complexities and dynamics of global security threats exacerbated by climate. In addition, the bill would re-establish the Special Representative for the Artic.

The bill comes at a time when the security risks of climate change are gaining national attention. The previous week, more than 50 former senior military and national security officials  security officials, including former Secretary of State John Kerry and former Secretary of Defense Chuck Hagel, penned a letter to the President emphasizing the need to include climate change in national security planning.

Cover photo by David Everett Strickler on Unsplash.

The global law firm Clyde & Co. launches climate change liability risks report
Acclimatise News

The global law firm Clyde & Co. launches climate change liability risks report

By Nadine Coudel and Dr Richard Bater

In March 2019, Clyde & Co. launched its climate change report ‘Climate change: Liability risks, a rising tide of litigation‘. The report explores the liability risks that organisations have faced and continue to face as plaintiffs attempt to use the courts to further their cause or sue for damages.

The report provides a broad overview of the evolving litigation risk landscape arising from the effects of climate change, identifying some of the key themes, controversies and legal hurdles.

The authors suggest that the significance of this trend should not be underestimated, with over 1200 climate change cases having been filed in more than 30 jurisdictions to date. As both litigation approaches and scientific evidence evolve, litigation increasingly represents a powerful tool in the hands of those who seek to attribute blame for contributing to effects of climate change or failing to take steps to adapt in light of available scientific evidence.

In as much as the physical risks of climate change raise both direct and indirect implications for a diversity of sectors, so too do the associated legal risks. As Clyde & Co Partner Nigel Brook remarks, “As the volume of climate change litigation grows and legal precedents build, new duties of care are emerging and the liability risk landscape is undergoing a shift which is likely to affect a wide range of commercial sectors”.

The authors classify litigation which has been emerging over the last two decades into three broad categories:

1. Administrative cases against governments and public bodies;

2. Tortious claims against corporations perceived as perpetrators of climate change;

3. Claims brought by investors against corporations for failing to account for possible risks to carbon-intensive assets or for failing to account for or disclose risks to business models and value chains in financial reporting.

The report also addresses novel approaches that claimants are adopting when bringing climate litigation, as well as the practical and legal considerations that these give rise to.

Finally, the report looks at global trends in climate litigation and their implications for businesses in different industries around the world, highlighting the issues which should be on companies’ radars over the months and years to come. The authors indicate that climate change litigation has already been deployed against companies beyond the oil and gas majors and suggest that this trend is likely to continue.

Litigation has advanced far from being targeted at first line ‘emitters’ to being used as a means of holding companies accountable for how they respond to the physical and financial risks of climate change. Clyde & Co. plans to explore these liability risks in greater depth in future reports.

Photo by Robert Bye on Unsplash

Update to landmark legal opinion highlights growing climate liability of company directors
Acclimatise News

Update to landmark legal opinion highlights growing climate liability of company directors

By Robin Hamaker-Taylor and Nadine Coudel

An update to the landmark 2016 Hutley opinion has been released by the Centre for Policy Development (CPD) on 29th March, 2019. The 2016 opinion set out the ways that company directors who do not properly manage climate risk could be held liable for breaching their legal duty of due care and diligence.

The supplementary opinion, provided again by Noel Hutley SC and Sebastian Hartford Davison on instruction from Sarah Barker, reinforces and strengthens the original opinion by highlighting the financial and economic significance of climate change and the resulting risks, which should be considered at board-level. It puts an emphasis on five key developments since 2016 that have built up the need for directors to take climate risks and opportunities into account and reinforced the urgency of improved governance of this issue. While the 2019 opinion is rooted in the Australian context, just as the 2016 opinion, it has much wider applicability, as much of the developments discussed in the update have been simultaneously happening in jurisdictions outside of Australia.

The five areas of development covered in the 2019 supplementary opinion include:

  1. Progress by financial supervisors: The 2019 opinion suggests statements made by Australian supervisory organisations such as the Australian Prudential Regulation Authority (APRA), Australian Securities and Investments Commission (ASIC) and the Reserve Bank indicate they now all see the financial and economic significance of climate change. Similar realisations have been happening among supervisory organisations in the UK, with the Prudential Regulation Authority (PRA) due to imminently release a supervisory statement on banks’ and insurers’ approaches to managing the financial risks from climate change, following a public consultation on the matter in late 2018 / early 2019. At the European level, the wider sustainability of the financial system is under review with the European Commission rolling out its Action Plan for Financing Sustainable Growth;
  • New reporting frameworks: Three new reporting frameworks have emerged since 2016. The most broadly applicable is The Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. In June 2017, the TCFD, a task force set up by the Financial Stability Board in 2015, published its final recommendations to help companies disclose climate-related risks and opportunities. The Principles for Responsible Investing (PRI) and CPD frameworks have now both aligned their climate-reporting frameworks with the TCFD recommendations. The other two reporting frameworks mentioned in the 2019 supplementary opinion are more relevant for the Australian context, and include the new recommendations on assessing climate risk materiality from the Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB), as well as the updated guidance from the ASX Corporate Governance Council;
  • Mounting investor and community pressure: Investors and community groups are increasing voicing concern around climate risks;
  • Development of the scientific knowledge: The UN Intergovernmental Panel on Climate Change (IPCC) published a special report on the impacts of 1.5 °C warming in 2018. The opinion recognises this as a “notable development in the state of scientific knowledge” that affects the gravity and probability of climate risks which directors need to consider; and     
  • Advances in attribution science: Important developments in attribution science have now made it easier to identify the link between climate change and individual extreme weather events.

The opinion suggests management of climate risks will require engagement with company directors in certain sectors in particular. These include banking, insurance, asset ownership/management, energy, transport, material/buildings, agriculture, food and forest product industries.

CPD CEO Travers McLeod, explains the implications of this supplementary opinion for company directors, stating “the updated opinion makes it clear that the significant risks and opportunities associated with climate change will be regarded as material and foreseeable by the courts. Boards and directors who are not investing in their climate-related capabilities are exposing themselves and their companies to serious risks”, according to a press statement.

Mr Hutley and Mr Hartford Davis write “the regulatory environment has profoundly changed since our 2016 Memorandum, even if the legislative and policy responses have not” […]“These developments are indicative of a rapidly developing benchmark against which a director’s conduct would be measured in any proceedings alleging negligence against him or her.”

The 2019 update to the 2016 landmark Hutley opinion also provides ample evidence as to why company directors all over the world not only need to be aware of their firms’ contribution to climate change – it is just as important to assess and disclose their potential climate risks in a transparent manner. It is therefore vital to ensure that future business plans are in line with the Paris Agreement and to also anticipate and prepare for climate change impacts, both in terms of risks and opportunities. The voluntary TCFD recommendations provide a framework for both corporates and financial institutions for assessing and disclosing climate risks and opportunities, and mandated disclosures are on the horizon. 

Acclimatise – experts in physical risk assessment and disclosures

Acclimatise has worked on physical climate risk and adaptation with corporates and financial institutions for over a decade, helping them identify and respond to physical risks and to take advantage of emerging opportunities generated by a changing climate. We have witnessed the corporate, societal and environmental benefits stemming from the promotion of resilience-building strategies.

To discuss how your organisation can meet TCFD or other disclosure requirements, please contact Laura Canevari: L.Canevari(a)acclimatise.uk.com

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Drought and conflict can spur climate refugees
Acclimatise News

Drought and conflict can spur climate refugees

By Tim Radford

Austrian researchers have made it simpler to identify climate refugees, claiming to have established a direct causal link between climate change, conflict and the numbers of migrants.

They are not the first to confirm that there is a statistical association between the likelihood of drought, or heat extremes, and violence. Evidence of cause for any civil or international conflict is always complex and often disputed.

But researchers now say that mathematical techniques provide an indirect connection between formally-established drought conditions and recorded levels of applications for asylum.

“In a context of poor governance and a medium level of democracy, severe climate conditions can create conflict over scarce resources”

The link is conflict, of the kind observed in Tunisia, Libya, Yemen and Syria.

“Climate change will not cause conflict and subsequent asylum-seeking flows everywhere,” said Jesus Crespona Cuaresma of the International Institute for Applied Systems Analysis.

“But in a context of poor governance and a medium level of democracy, severe climate conditions can create conflict over scarce resources.”

Specific conditions

He and colleagues report in the journal Global Environmental Change that they looked at data from the UN High Commissioner for Refugees of asylum applications from 157 countries between 2006 and 2015.

They then matched the patterns of asylum bids against conditions in their parent countries, using a measure that scientists call the Standardised Precipitation-Evapotranspiration Index, which provides a guide to the gap between rainfall and heat and drought.

They next assembled a tally measure of battle-related deaths collected by the Uppsala Conflict Data Programme in Sweden. Then they modelled other factors, such as the distance between the countries of origin and destination, the sizes of populations, the migrant networks, the political status of the drought-stressed countries and the known divisions into ethnic and religious groups.

And they found that – in specific circumstances – climatic conditions do lead to increased migration as a consequence of conflict exacerbated by the more severe droughts.

Hard to establish

All conclusions about human behaviour at the political level are difficult to establish. Archaeologists and climate scientists have repeatedly linked the collapse of ancient civilisations to climate change but in most such cases the evidence is circumstantial, and incomplete.

But there is often little or no direct testimony from the faraway past, and no surviving voice to offer a challenge. The connection between climate conditions and human response is less certain in a disputed world.

Researchers have systematically found associations between climate and violence and between climate and the conditions for civil inequality.

Urgent prospect

Some have found an association between drought and the conflict in Syria, but others have disputed the conclusion. Researchers have warned that future climate change could create large numbers of migrants and climate refugees and that both issues are urgent.

But it remains more difficult to establish that climate is the only or even the most pressing factor in any individual case.

So the IIASA finding is a cautious one, backed, the scientists say, by statistical rigour. This identifies climate change, and migration flow, and finds conflict as the causal mediator which links the two, most obviously in the events in the Middle East and North Africa since 2006.

“Our results suggest that climatic conditions, by affecting drought severity and the likelihood of armed conflict, play a statistically significant role as an explanatory factor for asylum-seeking exclusively for countries that were affected by the Arab Spring,” they write.

This article originally appeared on Climate News Network.

Tim Radford, a founding editor of Climate News Network, worked for The Guardian for 32 years, for most of that time as science editor. He has been covering climate change since 1988.

Cover photo by Christian Michelides/Wikimedia Commons (CC BY-SA 4.0): Refugees at the bridge connecting Braunau (in Austria) with Simbach (in Germany) waiting and freezing.
Climate science gets precise enough for legal action
Acclimatise News

Climate science gets precise enough for legal action

By Anita Makri

Scientific advances are paving the way for a rise in legal cases to enforce action on climate change, a policy forum has heard.

The Intergovernmental Panel on Climate Change’s October report on limiting global warming to 1.5 degrees is a “scientific milestone…and will be used in global litigation” to step up action, said Farhana Yamin, associate fellow at Chatham House and founder and CEO of the Track 0 initiative, at a conference in London from 15-16 October. She told SciDev.Net that the report makes a clear link between the impacts of climate change and human activities as the cause of that change.

Yamin, a lawyer who has been involved with the UN Framework Convention on Climate Change negotiations since they began in the mid-1990s, said the report also confirms the scale of losses felt in some part of the world, based on the 1 degree of warming that has already occurred.

“This is where the attribution information can come in—to say: you’ve got a liability for things you’ve never seen before, because of climate change,”

– Friederike Otto

Parallel to the IPCC process, scientific advances mean that models can now link individual weather events to climate change as the cause, said Friederike Otto, acting director of the Environmental Change institute at the University of Oxford in the UK. This is done through attribution science—much in the same way that smoking was linked to cancer decades ago—which is “very much in legal discussions at the moment”, said Otto.

Attribution science has been a game changer in the past five years, added Yamin: in the case of an event such as flooding or a heat wave, for example, “you don’t talk about a vague sense of weather any more — you can link it to anthropogenic activities that are causing long-term global change”.

Scientists can attribute an event to climate change by comparing the likelihood of it occurring today, under current conditions, to the likelihood of it occurring in a world without climate change. As things stand, this kind of attribution can happen as fast as a week after an event, Otto said. “For this summer’s heat wave [in Europe] we started on a Monday and had a press briefing on the results on Friday.

A number of legal challenges are already underway. Earlier this year, the government of Colombia was sued for fuelling climate change by failing to prevent deforestation in the Amazon. In 2015, a farmer in Pakistan filed a lawsuit against the government’s delay in implementing climate change policy to reduce vulnerabilities.

And last year, a regional court upheld a lawsuit by Peruvian farmer Raul Luciano Lliuya against energy firm RWE, Germany’s second largest electricity producer. Lliuya wants RWE to supply part of the cost of protecting his farm in Huaraz from a glacier lake, which risks overflowing from melting snow and ice.

But swift results depend on having immediate access to good data. And attribution can be done more easily for some events than others: tornadoes and hail, for example are harder to crack than heat waves, Otto told SciDev.Net.

According to Peter Stott, a climate scientist with the UK’s MET Office, estimates are more reliable when they are based on sound physical principles, consistent observational data and models that are powerful enough to replicate the event. Regionally specific analyses can be hard but are “increasingly possible”, he said.

Stott, who was part of a team that pioneered attribution science in 2013, believes that countries without enough capacity to carry out these analyses will miss out on crucial information that can help build resilience. As things stand, meteorologists in Africa are bogged down by operational demands and rely on past data to produce seasonal forecasts, he told SciDev.Net—which leaves their countries vulnerable to unfamiliar impacts.

“This is where the attribution information can come in—to say: you’ve got a liability for things you’ve never seen before, because of climate change,” said Stott.

This article was originally published on SciDev.Net. Read the original article.

Cover photo by NASA (public domain): This 3-D cross-section through Hurricane Irma’s eye was constructed using Global Precipitation Measurement’s or GPM’s radar data.

Climate lawyers to use UN 1.5C report to sue governments
Acclimatise News

Climate lawyers to use UN 1.5C report to sue governments

By Megan Darby

A major UN science report on global warming published [last week on] Monday will bolster climate lawsuits, according to legal experts and those seeking redress for government inaction.

The report from the Intergovernmental Panel on Climate Change (IPCC) sets out the difference in severity of climate impacts between 1.5C and 2C. It also indicates what would be needed to stabilise temperatures at the lower threshold.

That fuels a range of legal strategies to seek compensation or stronger climate action through the courts, lawyers say.

Roda Verheyen is representing ten families in a lawsuit against EU institutions, dubbed the People’s Climate Case. She will argue in the European General Court that the EU must adopt a more ambitious 2030 climate target to defend their human rights – drawing on the UN assessment of the science.

“There is a huge difference between 1.5 and 1.9 or whatever is ‘below 2C’, especially for the people I represent. The impact prognosis is very, very different,” she said.

In a letter to EU politicians, published in Climate Home News on Tuesday, the plaintiffs said the IPCC had confirmed that only European emissions targets that hold warming below 1.5C were compatible with their “fundamental rights”.

The signatories included Maurice Feschet, 72, a fourth-generation farmer in the south of France. He told CHN climate disruption has become more frequent since his youth.

Repeated drought has hit the lavender harvest, making it harder for his son to continue the family tradition, Feschet said. “It is very difficult to live now on this… we joined the ten other families to ask Europe to protect our way of life.” He added: “It is not for me I do it, it is for my children.”

What the IPCC special report does not do is fundamentally alter anyone’s legal obligations. These cases still rely on a mixture of existing national and international legal principles.

“It doesn’t change the law,” said Jonathan Church, lawyer at London-based firm Client Earth, “but at the same time it does potentially provide a lot of ammunition for those of us seeking to use the law to effect change in this area.”

National climate pledges under the Paris Agreement put the world on track for 3C of warming this century, according to the IPCC report, substantially exceeding the overall targets of 1.5C or below 2C.

The volume of climate lawsuits is increasing, as action to tackle climate change fails to keep pace with the impacts. “We expect more and more climate litigation in the coming years,” said Church.

Greenpeace Southeast Asia has a “climate justice” team. It is primarily focused on a petition to the Philippines Commission on Human Rights, seeking to hold major historic coal, oil and gas producers to account for their role in causing climate change.

People who have borne the brunt of intense tropical storms and other climate-linked damage have given testimony in a series of hearings in Manila. The inquiry continues with a session in London on 6-8 November.

Louise Fournier, a lawyer involved in the project, explained in a briefing note how they see the 1.5C report applying to climate litigation.

“States have positive obligations to prevent foreseeable violations of human rights,” she wrote, adding in bullet points:

  • “The IPCC special report outlines the very foreseeable risks of a world that is not aligned with 1.5C.
  • “Governments are put ‘on notice’ that their climate and energy laws and policies are not aligned with the latest IPCC science;
  • “Failure to align climate and energy laws and policies with the latest IPCC science exposes governments to climate lawsuits.”

Some climate lawsuits have already made a mark. Notably, campaign group Urgenda forced the Dutch government to tighten its 2020 emissions reduction target in line with international goals.

The government appealed, arguing it was a matter for policymakers to set such targets. The court of appeal is due to publish its ruling on Tuesday.

Previewing the appeal judgement last week, Urgenda director Marjan Minnesma said in a statement: “It’s disappointing that the Dutch government keeps fighting a judgement that has brought so much hope and inspiration around the world. The upcoming special report of the IPCC emphasises that we need to reduce emissions with much greater urgency.”

Former UN climate chief Christiana Figueres backed the campaigners, saying: “The judgment in the Urgenda case recognizes the critical importance of early action on climate change. If global greenhouse gas emissions continue to rise beyond 2020, the temperature goals negotiated in Paris, will almost certainly become unattainable.”

This article was originally published on Climate Home News and is shared under a Creative Commons license.

Cover photo by US Environmental Protection Agency (public domain): Flooding in Greeley, CO, September 19, 2013.

Further reading:

New study finds legal sector demand for climate services very likely to increase in near future

Reflections on climate service needs for the legal sector and how this may assist investment in adaptation
Acclimatise News

Reflections on climate service needs for the legal sector and how this may assist investment in adaptation

In June, Acclimatise, had the opportunity to present the MARCO (MArket Research for a Climate Services Observatory) legal case study at Adaptation Futures, the main biannual international conference on climate change adaptation. The conference gathers high profile academics from interdisciplinary fields, risk management and adaptation practitioners, government representatives, NGOs and businesses, among others. Our representative, Laura Canevari, introduced the results from the MARCO legal case study in the context of a session held on the third day of the conference, devoted to “Resourcing Adaptation”, and which explored different modalities to leverage investments in adaptation from public and private sources.

As noted by Laura, one of the ways to promote investment in adaptation and climate risk management is to increase companies’ understanding of the legal liabilities and reputational damages than can result from unmanaged climate risks. There is already increased attention and action on climate change driven by both legislation and litigation. In response, decision makers will need to revisit past assumptions and solicit advice on how to accurately assess, manage, and possibly disclose climate related risks to comply with legislation and fiduciary duties, as well as how to limit liabilities.

Unless and until hard and soft law are introduced that reduce ambiguity over duties, and until compliance regimes are introduced, there is likely to be an increase in contentious cases in the near term seeking to clarify the law. The legal profession will therefore be expected to update advice to ensure that clients are kept abreast of evolving climate-related liabilities in order that they can continue to act in their clients’ best interests. In a sense, in so far as lawyers supply advice and advocacy to clients on (legal) risks connected with climate change, the legal sector could itself be considered a climate service provider. There is therefore a need for better-informed lawyers across practices areas with a grasp of the sector-specific physical, transitional, and reputational risks of climate change facing their clients, and know where they may obtain reliable expert advice. On the supply side, considering the standards of proof routinely used by lawyers when presenting scientific results would assist the profession better marshal climate-related evidence.

An important factor that will affect a company’s decision to invest in adaptation is whether or not they can be held accountable and liable for climate related losses. In this context, it is important to note that advances in attribution science, increasing availability of high resolution data, and the refinement of climate models are changing the “foreseeability” of future climate impacts. This generates new grounds on which to dispute “force majeure” contractual clauses.

Improvements in science also can help clients allocating (climate-impacted) risk, reducing net risk and incentivising prudent risk management: The more foreseeable any climate related peril becomes, the less tenable will force majeure defence be and the greater the incentive to manage the risk and to invest in adaptation.

In conclusion, the results from the MARCO legal case study were warmly welcomed by the audience as they provided a clear directive for scientists on areas where information provision can be further advanced, and a clear path between the provision of climate services and investment decisions.

Cover photo by DFID/Flickr (CC BY 2.0): View of damage caused on by Hurricane Irma in Road Town, the capital of the British Virgin Islands.
Wisconsin reservation highlights success of managed retreat
Acclimatise News

Wisconsin reservation highlights success of managed retreat

By Georgina Wade

With global temperatures on the rise combined with a significant increase in the frequency of extreme weather events, investigations into methods of staving off climate change’s most dire consequences are continually in the works. And as an inevitable phenomenon at the moment, adaptation is the key response to minimising the unfavourable effects of climate change.

One such approach in discussion is managed retreat – in other words, deliberately getting out of harm’s way. Managed retreat involves the strategic relocation of assets and people away from areas at risk, enabling restoration of those areas to their natural state.

While migration is far from a simple solution and comes with its own set of complications, a Wisconsin reservation offers a climate success story.

The relocation of Odanah

In 1960, the village of Odanah, Wisconsin was up to its neck in floodwaters. The town, home to thousands of members of the Bad River Band of the Lake Superior Chippewa Tribe, had been built on the banks of the Bad River in the middle of a flood plain.

The flood had a magnitude 1.25 times the 100-year recurrence interval and became a turning point in the village’s history.

Three years later, the Bad River Housing Authority was established, and the first displaced families moved into new houses a few miles up the highway. In the next three decades, waves of people would move out of the flood plain until virtually the entire town had relocated to higher ground. And the relocation could not have had more optimal timing, as the real monster, in terms of quantity of water, came through directly afterwards.

Flooding in Wisconsin during the summer of 2016 resulted in damages estimated at $30 million USD with the state governor declaring a State of Emergency after rainfall amounts reaching 12 inches occurred within an eight-hour period.

Nicholas Pinter, a geologist at the University of California, Davis, says that moving out of the flood plain before the big flood is almost unheard of, which is exactly what makes the Odanah success story so unique.

“In a way, Odanah was very successfully moved right before the monster flood, the 2016 flood, came through,” he said. “That saved many hundreds of structures from potential flood damage.”

Quantifying the damage avoided

To fully understand the magnitude of managed retreats on minimising damages, the next step is to quantify the damages avoided. Pinter and James Rees, a student at the University of California, Davis, are hoping that hard numbers will be helpful for other governments trying to make similar decisions.

Long-term risks are notoriously difficult for local governments to plan for due to the complexities and uncertainties involved, and this is especially true for disasters like floods, which have a low likelihood of happening in any given year.

But using Odanah as a focal point, the duo is working at combining old maps with satellite data in an attempt to quantify the amount of damage that would have occurred in 2016 if the town had failed to move prior to the flood.

Use of migration as a risk reduction and adaptation strategy

Estimates vary widely, but between 25 million and 1 billion people could be on the move or permanently displaced due to climate risks by 2050, with 200 million being the most widely cited estimate, according to a 2015 study.

According to researchers, voluntary migration can lessen the risk of displacement by reducing exposure to climate hazards, and is therefore a contribution to individual and societal adaptation. Serving as an autonomous adaptation strategy, voluntary migration may appear as a reliable fix. But conversely, not everyone is equally able to act in this way to avoid climate impacts, or indeed wants to.

For one, those who lack the resources and networks to escape deteriorating environmental conditions may be unable to move, and therefore trapped in conditions of vulnerability. Migration can be relatively expensive with many social and legal barriers in the way, making it a rather poor bet for households already on the brink. Estimates suggest that the number of people unable to move away from climate change degraded areas may climb into the tens of millions by 2050.

Additionally, forced migration can be connected to loss of land, culture, identity and even sovereignty. In the case of Odanah, the Lake Superior Chippewa Tribe’s existence in Wisconsin is itself the result of a relocation forced by invading Europeans who drove them West. More recently, the Indian Relocation Act of 1956 prompted relocation by creating incentives for people living on reservations to move away from their allotted land and into cities.

In some parts of the country, entire tribes collapsed as the federal government ordered tribal government to dissolve, and it became financially impossible for families to remain on their land. Although not entirely forced, this can only serve to accentuate the circumstances under which Odanah began moving after the flood of 1960.

Navigating Complexity

The line between voluntary migration and forced displacement from climate change can be difficult to determine. Much movement – and indeed most movement related to environmental factors – is not entirely forced or voluntary, but rather falls somewhere on a continuum between the two, with multiple factors contributing to whether a person moved, where they move, how. But as with the Odanah relocation, what happens when the reasons for residing in a climate catastrophe prone area were unfair to begin with?

One example is Newtok in Alaska, where erosion is forcing the primarily Yup’ik Native village to relocate. As temperatures increase, the frozen permafrost underneath the village, which was established as a consequence for forced settlement, is thawing resulting in about 70 feet of land erosion each year. Since 1994, the Newtok community has been desperately seeking out funding to aid in their relocation to a plot of land 9 miles away. And more than twenty years later, money still remains the largest barrier in their endeavours.

As of March, the village secured more than $15 million USD in funding to begin relocating households to safer ground inland. This amount, however, is still just a fraction of what is required to relocate the entire village. According to the Army Corps of Engineers, the total cost of relocation could be as much as $130 million USD.

If there is not enough money to relocate the village collectively, Newtok residents could be forced to scatter, putting their community, culture, the Yup’ik language and identity at risk.

Without clear responsibilities and allocated funds to deal with managed retreat, vulnerable communities will continue to struggle to find permanent solutions to their predicament. Although FEMA has pushed for communities to plan for climate change, the federal government currently doesn’t have policies to deal with issues like relocation. As more communities face similar problems, a legal solution could be the only way to stay above water. And, as Odanah showed, managed retreat can turn out a success.

Cover photo by Commonist/Wikimedia Commons (CC BY-SA 3.0): The water tower in Odanah, Wisconsin.