Climate litigation trends: key steps to reduce your risk

Over the past decade, the number of climate-related lawsuits has more than doubled globally. Companies that receive a judgement against them can face hundreds of millions of dollars in legal costs and damages – as well as the unquantifiable impact on their reputation.

There are two core drivers of this growth: regulatory and societal. As climate regulation becomes more stringent and all-encompassing, businesses are making a number of climate commitments. This makes them more likely to be held to account, often using litigation as the tool for enforcement.

Meanwhile, individuals and communities are starting to feel the impact of climate change, either directly through intensifying weather events or indirectly through supply chain disruptions and inflationary pressures. With 24-hour media reporting, an enhanced awareness of the societal and environmental costs of climate change is fuelling a movement to hold businesses and governments to account for their perceived contribution.

These drivers are compounded by technological and scientific advances that make it easier to measure and monitor climate risks – and, therefore, to apportion blame. As corporate actions are more widely scrutinised and their consequences analysed, so expectations are growing that companies should take responsibility for the environmental impact of their actions, both today and historically.

Trends to watch

The climate litigation landscape is complex, constantly evolving and closely bound with political risk, leaving companies struggling to stay ahead of the trends. Large companies operating in several jurisdictions face a multitude of different, sometimes conflicting, regulations and legal environments to comply with.

Most legal cases centre on emissions targets, greenwashing and transition risks, but the scope for legal action is widening all the time.

Initially, governments were the main litigation targets before it broadened out to include large, mainly U.S., corporates, especially major polluters and large oil and gas companies. Today, lawsuits are moving along the emissions supply chain, targeting upstream and downstream companies and service-providers.

Greenwashing lawsuits are now among the fastest-growing categories of climate litigation, targeting companies across a range of sectors, including transportation, consumer goods and financial institutions.

The possibility of climate-related D&O litigation is also a growing concern for directors, although the number of cases remains fairly low. With boards facing mounting pressure to actively monitor and manage ESG commitments, this is an important trend to watch.

One emerging trend is ‘attribution litigation’ – a type of lawsuit that seeks to hold organisations responsible for specific climate-related harms by linking their actions directly to those impacts. It is based on the nascent science of climate attribution which quantifies the contribution of human-made emissions to specific events such as flooding, heatwaves and storms.

Simple steps to reduce your risk

Navigating litigation risk in this extremely fluid and complex environment is challenging, especially for companies operating in several jurisdictions. There are, however, several fundamental steps for all businesses that can help mitigate the risks.

First, understand the risks and your exposure. Map current and pending climate regulations in the counties in which your business operates. Stay informed about legal precedents and alert to regulatory changes that may be imminent, especially in relation to political changes. There are important variations across regions and industries, so monitoring lawsuits in your particular sector and geography is important.

Once regulatory and legal risks are identified, businesses can then assess their own exposure. Map the parts of your business, products and supply chain that are most at risk from litigation. Crucially, have a process in place for continually monitoring changes – litigation is a fluid risk that demands a dynamic response.

Second, establish good governance. Board engagement is vital, with clearly identified responsibilities for senior management. Climate litigation exposures can emerge from anywhere in the business so integrate your climate-litigation risk management strategy into your broader business strategy – ‘bolt on’ strategies are not sufficient.

Be transparent about your disclosure and honest about your climate impacts. It is vital to resist the temptation to over promise – make commitments based on actions not aspiration.

Third, ensure consistent messaging both internally and externally. With different jurisdictions being subject to different regulations and legal frameworks, it is important to establish centralised messaging that is appropriate across all geographies in which the business operates. Marketing, investor, legal and sustainability teams each gain different value from environmental messaging which can lead to misaligned positioning. Clear internal communication is therefore vital.

Fourth, lean on external expertise. Working closely with advisors, brokers and insurance partners can help to monitor litigation developments to ensure your organisation doesn’t fall foul of the fast-changing legal landscape. Insures’ climate and sustainability departments and their risk engineering teams have a wealth of experience to support companies embed litigation risk within a broader climate strategy and to support your business mitigate its exposure before losses arise.

Conclusion: taking control

While climate-related litigation is a complex and evolving risk, trends suggest that expectations around climate responsibility are increasing, and many sectors may face heightened scrutiny. Climate-related lawsuits can be costly, and reputational impacts may persist, even for companies that prevail in court.

Amid this uncertainty, staying informed – by understanding regulatory changes and legal developments – empowers companies to take targeted, effective action. Proactively addressing these risks and consulting with external advisors can help organizations navigate complexity and take a strategic approach to managing exposure.

 

Originally published in Commercial Risk on August 19, 2025.