2. Procedures and Evidence

4. EMERGING ARGUMENTS IN CURRENT AND ANTICIPATED LITIGATION

This section explores the potential of plaintiffs' arguments to tackle prevailing barriers and challenges in corporate climate litigation by reinterpreting directors' fiduciary duties and corporate disclosure obligations, partial responsibility, and duty of care in the context of climate change impacts.

Directors' Fiduciary Duties and Corporate Disclosure

Central to current litigation efforts are the arguments based on directors' fiduciary duties and corporate disclosure obligations. In Australia, litigation against directors for failing to fulfil their fiduciary duties in the context of climate change is enriched by the insights from the "Hutley Opinions" of 2016, 2019, and 2021. These opinions articulate:

1. Directors' Fiduciary Responsibilities: Offering a legal critique and interpretation concerning directors' duties amid climate change, the opinions argue that under section 801(1) of the Corporations Act 2001 (Cth), directors' fiduciary obligations to act in the corporation's best interests encompass the duty to consider and address climate-related risks. Ignoring such risks may thus be viewed as a dereliction of directors' duties.
2. Obligations of Disclosure: Highlighting the critical nature of transparency regarding climate-related risks, the opinions maintain that corporations are obligated to inform shareholders and other stakeholders about significant climate change-related risks. Non-disclosure could thus be considered as a breach of corporate law's disclosure requirements.
3. Misrepresentation and Deception: Furthermore, the opinions propose that corporations might face accountability for engaging in misleading or deceptive conduct about climate-related issues. This includes disseminating false or insufficient information about the company's climate risks, impacts, or mitigation measures, potentially breaching consumer protection laws and incurring legal liabilities.

Partial Responsibility

Corporate climate litigation may increasingly focus on refining the concept of partial liability for corporate entities based on their proportional contributions to global warming emissions. This approach is being explored in Germany, as seen in the RWE case pending before the Higher Regional Court of Hamm. In this case, Peruvian farmer Lliuya argued for RWE to cover 0.47% of his costs for protective measures against climate change impacts, such as glacier melt and subsequent flooding risks in his area, attributing these specifically to RWE's emissions. Although the case was dismissed in the lower court, the Higher Regional Court of Hamm, acting as the appellate body, demonstrated a willingness to consider RWE's partial liability. The Regional Court decided to gather evidence to determine whether Lliuya's home faces threats of flooding or mudslides due to the recent expansion of a nearby glacial lake, and to what extent RWE's greenhouse gas emissions have contributed to this risk. This stance signifies a shift towards judicial recognition of the responsibility of corporate entities in mitigating climate change.

Duty of Care

Pending legal cases are currently examining the extent to which companies fulfill their duty of care in relation to climate change impacts.

• In France, BNP Paribas faces litigation under Article L. 225-102-4 of the French Commercial Code, which mandates companies to develop a vigilance plan to identify risks and prevent severe human rights violations, environmental damage, or health risks related to a company's operations. BNP Paribas claims compliance with their duty of care requirements, though the case awaits a detailed merit-based review.

Meanwhile, future litigation is anticipated to explore the need to evolve duty of care principles to address climate change impacts effectively.

• In Australia, the legal landscape is adapting to the realities of climate science, yet challenges remain, especially as legal frameworks for proving causation risk becoming outdated. Particularly, it is challenging to establish a duty of care with the stringent requirement to prove a direct and necessary relationship ("proximity") between the defendant and plaintiff for the harm to be foreseeable. This challenge is particularly pronounced for group plaintiffs. In response, the court has acknowledged the need to evolve duty of care principles to effectively address the complexities of climate change impacts.
  
  In Sharma v. Minister for the Environment, eight Australian children aimed to block the approval of a coal mine expansion. They claimed that the Federal Environment Minister had a unique duty of care under the Environment Protection and Biodiversity Conservation Act 1999 to consider the environmental impacts of such decisions. Although a Federal Court judge initially agreed with this duty of care, the appellate court overturned the decision. The appeal raised concerns about whether policy issues related to environmental protection were suitable for judicial determination and questioned the ability of courts to address these matters within the framework of negligence law. Specifically, in the appellate decision, Judge Beach noted a lack of "sufficient closeness and directness" between the plaintiffs' circumstances and the Minister's actions, leading to the conclusion that establishing a new duty of care in this context was not feasible.
  
  In his obiter remarks during the appeal before the Full Court of the Federal Court of Australia, Justice Beach highlighted the need for the High Court (not the Federal Court) to evolve duty of care principles to address the complexities of climate change impacts: "it is for the High Court not us to engineer new seed varieties for sustainable duties of care, modifying concepts such as "sufficient closeness and directness" and indeterminacy to address the accelerating complexity, multiple links and cross-links of causal relations. Such concepts in their present form may have reached their shelf life, particularly where one is dealing with acts or omissions that have wide-scale consequences that transcend confined temporal boundaries and geographic ranges, and where more than direct mechanistic causal pathways are involved."