Climate Court Decision Heightens Pressure on Insurers

A leading lawyer has said that a landmark Dutch court decision has put governments, firms and re/insurers in the firing line over climate change.

Speaking following the landmark ruling by the Dutch Supreme Court, on Friday, Nigel Brook Partner at Clyde & Co said insurers and their corporate clients have been issued with a clear warning over their role in combating climate change.

“On 20 December the Dutch Supreme Court upheld the ruling in the Urgenda Climate Change case that the Dutch Government must reduce greenhouse gas emissions by at least 25% (from 1990 levels) by the end of 2020,” he explained. “This is a landmark decision, not least because of its legal basis: the principle that the government is required to protect the country’s citizens against the dangers posed by climate change.

“The case began in 2015 and since then judgments in the Netherlands and elsewhere have referred to rulings made by the lower courts. This final decision might prompt others to pursue human rights-based cases against their governments in an effort to accelerate the transition to a low-carbon economy.”

Mr Brook warned that regulators were looking at companies’ performance around climate change with the Bank of England (pic) leading the way.

“Looking around the world, most climate cases to date have been against governments, but lawsuits are increasingly targeting the highest greenhouse-gas-emitting companies and their directors and officers,” he added. “Cases are also being brought alleging that oil and its derivatives are defective products causing loss and damage.

“Regulators are increasingly focusing on climate risk too. The Bank of England is one of the leaders in this regard and on 18 December it launched a three-month consultation on its proposal to put UK lenders and insurers through what is being described as ‘the world’s stiffest climate stress tests.’

“There is a rapidly growing consensus that climate change goes to the core of the world economy and will require a coordinated global response from governments, regulators, business and insurers, among others.”

SHARE: