Climate change liability risks
Showing 1 - 10 of 19
With the increased attention to environmental social and governance (“ESG”) policies by regulators, investors and businesses, financial lines insurers are faced with the potential risks of exposure to investigation and litigation over climate-related disclosures. This article focuses on the question of whether the increased scrutiny climate-related disclosures has actually impacted the rate of greenwashing litigation filings, and how trends in greenwashing litigation may inform financial lines insurers’ assessment of these risks.
Despite its reputation as a largely arid land, Australia is shaping up as a most fertile ground for climate litigation. For insurers, climate exposure is no longer limited to the flames and storms that herald the start of the first party disaster season. Rather, insurers can expect to see more policy claims from insureds being pursued for misleading and deceptive conduct, non-disclosure, regulatory breaches and discovery requests. So too, as recently seen in New Zealand, insureds might well find themselves contesting novel duty of care claims.
Case review 29/11/2021
In the wake of the COP26 conference and the potential for further climate change litigation, we look at the recent Court of Appeal decision of Jalla & Anr v Shell International Trading & Anr [29. 09.21] which considered the extent to which representative actions may be allowed in mass environmental tort claims.
London Market casualty insurers are continuing to experience increased notifications for climate change related claims. It is likely that this increase will prevail in light of the Glasgow Climate Pact at COP26 which asks countries to “accelerate efforts towards phasing down unabated coal power”.
Storm clouds ahead: The US Supreme Court sidesteps issues relevant to ESG and climate change, while international and other pressures on corporate and D&O disclosures continue to mount
The US Supreme Court is trying its best to sidestep any material rulings on climate change decisions in view of its recent BP P.L.C. et al. v. Mayor and City Council of Baltimore decision and its refusal to review the Chevron Corp. v. City of Oakland, California case, wherein the Ninth Circuit held that climate change cases against large oil companies belong in state court.
Earlier this year, the Court of Appeal ruled that the planned expansion of Heathrow Airport was unlawful. In particular, the Court of Appeal determined that the Secretary of State for Transport had failed to take into account climate change obligations contained within the Paris Agreement on Climate Change when drafting the Airport’s National Policy Statement.
After 197 countries signed the Paris Agreement in 2015, there has been a call for industries to solidify proposals to tackle climate change. Additionally, the onset of the COVID-19 pandemic has amplified the effects that these industries have had on the environment.
Insurers will come under increasing pressure from major corporate clients and consumers to demonstrate their pro-active engagement to tackle global warming and play a major part in helping hit the UK’s 2050 target for net zero emissions.
Insurers must balance the income from insuring and investing in fossil fuel projects against the growing reputational and litigation risks.
London Market casualty insurers are experiencing increased notifications for climate change related tort claims pursued against “Big Oil” defendants in the USA and other jurisdictions. We outline the headline policy coverage issues arising from these claims and whether the experience of other jurisdictions will be replicated in the UK.