Climate Change Litigation in the European Union: The Netherlands
On January 13, 2022, the NGO Milieudefensie (the Dutch chapter of Friends of the Earth) announced that it had sent a letter to 29 Dutch companies and financial institutions considered by Milieudefensie to be "Netherlands' large polluters." Not only has this letter been sent to energy majors, but also to entities from a variety of sectors, including pension funds, banks, consumer groups, and chemical groups. In this letter, the NGO called on the chief executives of these companies to draft a "climate plan" before April 15, 2022, detailing and explaining the actions that will be taken to reduce the companies' CO2 emissions by 45% in 2030 relative to 2019 levels, in line with the UN Climate Convention and the Paris Climate Agreement.
According to Milieudefensie, the ruling issued by Hague District Court on May 26, 2021, in the case against Royal Dutch Shell implies that every large CO2 emitter in the Netherlands has, at a minimum, an obligation to reduce its emissions in line with the global imperative that has been confirmed most recently by the Glasgow Climate Pact. Milieudefensie has indicated it is collaborating with the New Climate Institute to assess the plans of all companies and publish the results and a ranking in June 2022.
With this new initiative, Milieudefensie expects that, by implementing their "climate plan," the 29 companies targeted will individually reduce their CO2 emissions (scope 1, 2, and 3) by at least 45% by 2030 compared to 2019 levels. Although Milieudefensie announced that it was not intending to start litigation against each and every company, it did not exclude taking "follow-up steps" against the addressees that do not comply with this demand.
Some of the targeted companies have already provided a response to Milieudefensie by pointing to their climate efforts, but none has provided further information on whether they are planning to comply with the demand and provide the said "climate plan."
This action confirms the new face of NGO climate change activism, which is taking the form of increasingly concrete actions against companies. Rather than the traditional "name and shame," it is now transforming into a "name and change" initiative, under which NGOs seem to position themselves as "regulators" by imposing on companies the implementation of measures to mitigate climate change under the threat of litigation.
This kind of action is likely to be extended outside of the Netherlands and may create a risk of businesses receiving similar requests making climate change-related voluntary commitments that they cannot keep. In light of such voluntary commitments, the risk of businesses being held to a standard later that is not contemplated now is significant and should be carefully considered before providing any response to such requests.
Caution is therefore advised when establishing a response to this new kind of action, and absolute statements or commitments on climate change mitigation measures should be avoided or drafted carefully unless there is certainty that they can be fulfilled.
Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our “Contact Us” form, which can be found on our website at www.jonesday.com. The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.