CLIMATE CHANGE AND ENVIRONMENTAL DISPUTES
CD: Could you provide an overview of the conflicting interests created by climate change and environmental concerns? To what extent is such friction leading to legal disputes and court cases?
Rubinstein: There is an increasing desire by many corporate stakeholders, from shareholders to consumers to employees and counterparties, for companies to play a more active role in considering climate and other environmental impacts of their businesses and ways those impacts can be reduced. Similarly, there are pressures to explain to stakeholders what is being done to reduce these impacts and to show how companies are differentiating themselves and their products in this regard. With this desire for more action and communication comes the risk of litigation looking to test companies’ actions and statements.
Cassel: Combatting greenhouse gas emissions poses issues of industrial transition and costs. Entire industries are at risk of disappearing. Fossil fuels, beginning with coal fired power plants which are already being phased out in Europe and North America, but not in China or India, are prime examples. Other industries are seeing a significant shift. For example, moving from gasoline to electric vehicles will affect not only the auto industry but also filling stations, auto mechanics and auto parts supplies. And those industries that will remain, such as real estate, still must adapt to lower carbon emissions. These changes and their associated costs are prone to generate legal disputes among commercial parties. The new technologies for green energy, the new regulations on environmental, social and governance (ESG) matters, in particular those imposing reporting obligations and liability on businesses, are also likely to lead to disputes.
Apr-Jun 2024 issue
Herbert Smith Freehills LLP
King & Spalding LLP
Norton Rose Fulbright LLP