Rapid increase in number of lawsuits against fossil fuel companies
Around five years ago, the Dutch government lost a lawsuit forcing it to reduce its greenhouse gas emissions. It was the first time a court had compelled a government to act against climate change. Fast forward to today and there are new targets in the legal battle against climate change: major fossil fuel companies.
Currently, there are various court cases pending in the Netherlands, France, the UK and the US, aimed at forcing energy companies to stop using fossil fuels sooner.
The Grantham Institute recorded 1,587 cases of climate litigation between 1986 and the end of May 2020, 1,213 of which took place in the US. The graph shows the huge increase in the total number of court cases in that 35-year period.
Could the same happen with fossil fuel companies? Litigation against companies is nothing new. But so far, the primary aim of this has been to obtain compensation from them for actual victims. It is difficult to link as yet undeterminable damage from climate change directly to energy companies.
Therefore, the focus of the litigation is shifting to more creative compensation practices. For example, by obliging companies to reduce their CO2 emissions, abandon their production of fossil fuels or increase investments in renewable energy sources. Or, simply, to introduce a good climate policy.
It is highly likely that future court cases focus not only on the fossil fuel companies themselves, but also on investors and banks - the parties providing them with the necessary financing. Pension funds are already coming under fire. At the end of last year, one of Australia's biggest pension funds agreed a settlement in a case concerning climate change.
The pension fund was accused of not protecting its members’ pension savings against the change in global climate conditions. As part of the settlement, the pension fund agreed to incorporate the financial risks related to climate change in its investments.
This growing litigation represents a new front in the fight to get companies to take responsibility for the climate change crisis. It remains to be seen whether a court can force an oil and gas company to change course. But I do believe the financial sector should play a bigger part.
Banks, insurance companies and asset managers play an important role in financing the transition to a climate-neutral economy. At present they still have considerable exposure to the financing of the fossil fuel industry.
They could easily call upon their credit clients to set climate change objectives, which would allow them to make their credit and investment portfolios less climate sensitive. The best way to do this is by offering a reward, such as lower interest rates for climate-neutral loans. This would create a win-win situation for both lenders and borrowers.
The information contained on these pages is for marketing purposes and solely intended for Qualified Investors in accordance with the Swiss Collective Investment Schemes Act of 23 June 2006 (“CISA”) domiciled in Switzerland, Professional Clients in accordance with Annex II of the Markets in Financial Instruments Directive II (“MiFID II”) domiciled in the European Union und European Economic Area with a license to distribute / promote financial instruments in such capacity or herewith requesting respective information on products and services in their capacity as Professional Clients.
The Funds are domiciled in Luxembourg and The Netherlands. ACOLIN Fund Services AG, postal address: Affolternstrasse 56, 8050 Zürich, acts as the Swiss representative of the Fund(s). UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zurich, postal address: Europastrasse 2, P.O. Box, CH-8152 Opfikon, acts as the Swiss paying agent. The prospectus, the Key Investor Information Documents (KIIDs), the articles of association, the annual and semi-annual reports of the Fund(s) may be obtained, on simple request and free of charge, at the office of the Swiss representative ACOLIN Fund Services AG. The prospectuses are also available via the website www.robeco.ch. Some funds about which information is shown on these pages may fall outside the scope of the Swiss Collective Investment Schemes Act of 26 June 2006 (“CISA”) and therefore do not (need to) have a license from or registration with the Swiss Financial Market Supervisory Authority (FINMA).
Some funds about which information is shown on this website may not be available in your domicile country. Please check the registration status in your respective domicile country. To view the RobecoSwitzerland Ltd. products that are registered/available in your country, please go to the respective Fund Selector, which can be found on this website and select your country of domicile.
Neither information nor any opinion expressed on this website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco Switzerland Ltd. product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports.