Climate change liability risks
Showing 1 - 10 of 15
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.
On 18 June 2020, the Bank of England (the Bank) released its first report regarding its own exposures to climate change-related financial risks and its proposed strategy to manage those risks effectively.
The results of Part 2 of the Law Commissions’ joint consultation into the regulation of automated vehicles, “emphasised how uncertain the future has become, and how regulation must be sufficiently flexible to deal with a wide variety of eventualities.”
Since our last article on climate change considerations, perception has moved to a recognition that climate risks affect all sectors, including financial institutions.
On March 23, 2020, Pacific Gas & Electric (PG&E)—the California energy utility—announced that it will plead guilty to criminal charges for its role in the 2018 Camp Fire in Northern California, which led to the deaths of 85 people and caused billions of dollars in property damage. This plea brings a lengthy investigation to a conclusion, but it is not anticipated that PG&E’s existing civil liabilities ($24.5 billion) will increase as a result of the plea agreement.