UK & Europe
Climate Change Risk Practice
Following hot on the heels of the Dutch court’s finding against Shell, action groups in Germany have now threatened to commence legal action against Volkswagen, Mercedes-Benz, BMW and gas and oil firm Wintershall Dea.
In an announcement on 2nd September, followed by formal letters to each of the companies on 3rd September, environmental NGO, Deutsche Umwelthilfe (DUH) and Greenpeace have called upon the companies to align business activities with the goals of the Paris Climate Agreement, and to stop the production of combustion engine cars by 2030, and the exploration of new oil and gas fields from 2026. They have given the companies until 10am on 20th September to issue “cease and desist” statements, failing which, they intend to commence legal proceedings, based on the action brought in the Dutch courts by Milieudefense against Shell.
In its landmark decision in May this year, the District Court of the Hague ordered Shell to reduce its net CO2 emissions by 45% compared to 2019 levels, with the reduction to be achieved by the end of 2030 at the latest. The case was brought against Shell by environmental groups Milieudefensie (Friends of the Earth Netherlands), ActionAid and others, and was supported by more than 17,000 Dutch citizens, marking the first time that a corporation has been held to be responsible for reducing its net emissions in line with targets introduced by the Paris Agreement.
The potential claimants in the action against the three car manufacturers and Wintershall are the directors of DUH, suing in a personal capacity. As in the Milieudefensie case, they claim that the companies’ excessive CO2 emissions will violate their rights: in this case, to freedom, property and health analogous to Section 823 BGB. The action groups’ case also references the recent climate decision of the German Federal Constitutional court, from which, the groups argue, they can derive a mathematical CO2 budget for each company (see: Germany's Federal Climate Protection Act incompatible with fundamental rights).
Given the result in the Dutch court, it was widely anticipated that such actions against corporates would be pursued. However, there is a degree of scepticism as to the potential chances of success for this claim, as the Federal Constitutional court put a duty of care on the government not individual companies, and the phasing out of fossil fuels is being addressed at a political level. However, it is stated that the threatened action against the companies will proceed even if they are compliant with applicable laws.
Unsurprisingly the companies involved have rejected the threatened action as inappropriate and have stated their intent to robustly defend any action. Automobile manufacturers have also strongly denied the allegation that their climate goals are not compliant with the Paris Agreement.
However, it seems likely that this will be the first of many lawsuits seeing to hold corporates to account for climate change, notwithstanding their compliance with local environmental regulations; and whilst for now, the targets are the energy, power and auto sectors, other industries might become the focus of attention in the not too distant future, both in Germany, and in other jurisdictions.
For further background, see our recent publications, including the Climate change risk and liability report 2021 and the Climate Change Litigation report by Geneva Association (Climate Change Litigation Insights into the evolving global landscape), which we have co-authored.