Emergence of Aggressive Climate Litigation Changing the Landscape for Voluntary Disclosure Programs

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Reprinted with permission from Bloomberg BNA, Insight
Climate Science, Litigation
Author:  Lindene Patton

Scientists have demonstrated an improving ability over the past few years to analyze extreme weather events and determine how much the frequency or severity of an event has been affected by climate change. At the same time, individual companies, including Exxon Mobil, have been the target of investigations into their knowledge of the risks and impacts of climate change. In this Bloomberg BNA Insights article, Lindene Patton, a partner with Earth & Water Group, explores the changing landscape of attribution science and climate litigation, with a focus on how those changes affect voluntary disclosure programs.

Voluntary disclosure programs have a long history and are considered synonymous with responsible environmental stewardship. These programs, in the area of regulated pollutants, have been used as methods to achieve compliance, create reputational value and manage scarce enforcement resources. Those efforts are typically tightly coordinated with or done under the supervision of in-house counsel.

Broader voluntary disclosure and corporate social responsibility (CSR) pledge programs related to environment, social and governance (ESG) initiatives have, by contrast, often been directed and managed by CSR offices or human resource functions with much less involvement from the general counsel’s office. However, recent developments in human rights claims, attribution science and climate related disclosure actions suggest that greater involvement and coordination of ESG and pledge programs with legal counsel is warranted because the risks have changed in ways not previously contemplated by many.

Those changes include:

  • the growing ability to definitively attribute the severity of individual events, or the frequency of a suite of events, to anthropogenic climate change;
  • the discovery of documents that may change the date when certain individuals and potentially industries are deemed to have known about the risks and impacts of climate change;
  • the creation of work product by activists that frame an argument for damage allocation to greenhouse gas emitters akin to market share theory for pharmaceutical products; and
  • the filing of human rights actions seeking compensation for extreme weather event impacts from large carbon emitters.

Voluntary disclosure programs are laudable and valuable endeavors. But dramatic increases in public scrutiny, the wider availability of data, and advances in attribution science call for companies to re-think their risk management in this sector.  (Continue Reading . . . )