Litigation risks associated with climate change's impacts continue to pose a risk for businesses and governments. Many of the proceedings brought to date has been from activist groups for strategic purposes. However, as the physical risks of climate change crystallise, we can expect to see more 'routine' litigation by businesses and landowners for issues like property damage and business loss. 

Many companies and governments are proactively considering their climate change risks, and planning their organisation or jurisdiction to be resilient to such challenges. For example, some organisations are;

  • divesting from assets highly exposed to climate change and its related impacts or which may not be viable in a transition to a low-carbon economy
  • incorporating into their business plans capital works to reinforce against extreme weather events and business interruption strategies, and
  • considering any business opportunities associated with modelled changes in weather patterns.

Such a proactive approach to physical and transition business risks, may in turn alleviate the potential for litigation risks from investors.

The trends identified in the Grantham Institute report make clear that governments or corporations taking a passive approach to managing climate change risks may find themselves on the receiving end of litigation from activists, shareholders, landowners, and other businesses.