UN explores prospects of climate change litigation
LONDON (Reuters) - Companies which contribute to climate change will increasingly face legal action, law firm Freshfields said on Wednesday, launching U.N.-sponsored research which highlights investors' environmental responsibilities.
"Twenty or thirty years ago you were looking at the beginning of tobacco litigation," Freshfields lawyer Paul Watchman said.
"There's going to be a whole host of (climate-change) actions ... we might look to do that kind of thing."
London-based Freshfields was launching with Dutch bank ABN Amro a report produced for the United Nations Environment Programme (UNEP) which said that institutional investors were obliged to consider environmental, social and governance (ESG) issues.
The report aims to encourage investors to address ESG concerns -- such as climate change or child labour -- in their investment decisions, and so bring financial pressure to bear on such issues.
"In our view, (investment) decision-makers are required to have regard, at some level, to ESG considerations in every decision they make," the report said.
In October, the U.N. brokered an agreement by 21 institutional investors, jointly representing $1.7 trillion of assets, on six principles for socially responsible investment, principles due to be formally declared next March.
Lawsuits against alleged errant investors and companies have so far been focussed in the United States.
States including California, Connecticut, Iowa and New Jersey and the city of New York are suing energy companies such as American Electric Power, Cinergy Corp. and Southern Co. to force them to cut their greenhouse gas emissions, Watchman noted.
Such gases, including carbon dioxide, are widely blamed for contributing to global warming and increasingly extreme weather.
In addition, various non-government organisations (NGOs) are bringing actions against U.S. government agencies, while the Inuit people have lodged a petition to the Inter-American Commission on Human Rights for the dangerous impact of climate change, Watchman told Reuters.
"There is a real danger that the scientific proof linking climate change damage with contribution to global warming through carbon dioxide emissions may be established," he added.
Delegates from some 189 countries are this week debating in Montreal a possible extension to the Kyoto Protocol, which obliges about 40 industrial nations to cut greenhouse gas emissions by 2012.