COP28 is underway at a time when the world is behind on carbon emissions reductions and countries are failing to meet their climate commitments. The Global Stocktake report has been released and the UNEP recently published their Emissions Gap Report 2023 finding that while global temperatures are rising, emissions reductions aren’t manifesting as expected. Now, the courts are becoming a key tool in enforcing climate agreements. Clean Energy Wire recently published an article on how this is unfolding in Germany where courts recently ruled that the German government must present climate action programs for transport and buildings. The article states that:
“The Berlin-Brandenburg Higher Administrative Court ruled that the government was in breach of the country’s climate action law, which stipulates that if a sector misses its annual emission reduction targets, the responsible ministry must introduce an immediate climate action programme, which the full cabinet must then agree. This must include short-term measures to ensure targets are reached in the following years, in this case from 2024 to 2030.”
As increased sovereign promises made at COP28 may convert into policy, more nations are likely to follow Germany’s lead and demand closer term targets be met. Given the litigious culture of the US, we’re likely the next domino – although COP28 could end up casting a wider net of new litigation, especially given that the UN is putting pressure on countries to take action. Companies should be aware that court decisions like these can have business impacts. It’s easy to assume that litigation against the government is only the business of the government. However, when governments are ordered to reduce emissions, those emissions reduction plans trickle down to the private sector. Government contracts may be altered, vendors with lower carbon footprints may be prioritized, and subsidies may be reduced for high-emitting sectors. Companies may find that it is worth it to have a transition plan that goes beyond current national targets to insulate themselves from the risk of last-minute regulatory pressure.
If you aren’t already subscribed to our complimentary ESG blog, sign up here: https://practicalesg.com/subscribe/ for daily updates delivered right to you.