Author: Matheus Carvalho
The climate crisis is one of the greatest challenges of the 21st century, affecting not only the environment but also the economy, politics, and society as a whole. In this context, the transition to a low-carbon economy has become a priority, requiring coordinated action between governments, businesses, and civil society.
Given this scenario, the law plays a fundamental role in this transition, acting as an instrument to guarantee the implementation of effective climate policies, encourage sustainable business practices, and ensure environmental accountability through climate litigation.
But what exactly is climate litigation, and how does it connect to the ESG ( Environmental, Social, and Governance ) agenda?
What is climate litigation?
Climate litigation refers to lawsuits and other legal mechanisms used to pressure governments and companies to take stricter measures against climate change. These lawsuits can be filed by individuals, non-governmental organizations (NGOs), affected communities, or even investors concerned about climate risks.
In practice, climate litigation seeks to hold accountable those who contribute to the climate crisis, whether through omission or actions that exacerbate the problem, such as excessive greenhouse gas (GHG) emissions. Furthermore, climate litigation also plays an essential role in creating legal precedents that strengthen sustainability policies.
Law and the Low-Carbon Economy
A low-carbon economy is based on practices that minimize GHG emissions, prioritizing the use of renewable energies, energy efficiency, and the preservation of natural resources. To achieve this economic model, it is essential to have regulatory frameworks that encourage and guarantee the transition.
In this sense, environmental law has been one of the main allies in this process, with legislation that promotes sustainable development and establishes emission reduction targets. In Brazil, for example, the National Policy on Climate Change (Law No. 12.187/2009) defines guidelines to mitigate the impacts of climate change and integrate the country into a low-carbon global economy.
However, the implementation of these policies depends on robust legal mechanisms that guarantee their enforcement and penalize non-compliance. This is where climate litigation comes in, as a tool to monitor and demand environmental accountability from companies and governments.
The Role of ESG in Climate Transition
The ESG ( Environmental, Social, and Governance ) agenda has gained traction as an essential criterion for evaluating the sustainability and responsibility of companies. In the climate context, the environmental (E) pillar of ESG is directly linked to the low-carbon economy, encouraging business practices aligned with global emission reduction targets.
Integrating ESG into corporate strategies also reduces legal risks, since companies aligned with environmental standards are less likely to face lawsuits for environmental damage. Furthermore, transparency in ESG practices strengthens the trust of investors, consumers, and other stakeholders , creating a competitive advantage in the market.
Climate Litigation Cases in Brazil and Around the World
In the international arena, climate litigation has generated decisions with a major impact. A paradigmatic example is the case of Urgenda Foundation vs. Netherlands , in which the Supreme Court of the Netherlands, in 2019, ordered the government to reduce greenhouse gas (GHG) emissions by at least 25% by the end of 2020, based on 1990 levels. This decision was groundbreaking, marking the first time a court compelled a state to adopt effective measures against climate change.
The Supreme Court's decision highlighted the application of the precautionary principle and emphasized intergenerational responsibility. It recognized that unmitigated anthropogenic emissions pose a threat to present and future generations. The court also cited the European Convention on Human Rights to justify that each country must assume responsibility for contributing to the fight against global warming.
In Brazil, although climate litigation is in its early stages, significant progress has been made. Lawsuits related to the Amazon Fund and environmental enforcement demonstrate the growing role of the Judiciary in protecting natural resources. These actions show how climate litigation can be a powerful tool to strengthen compliance with environmental commitments undertaken by the country.
Brazilian courts have also adopted innovative approaches to hold governments and companies accountable for environmental damage. The theory of alternative causation, for example, has been used to broaden the liability of polluters, including those who contribute to deforestation and greenhouse gas emissions. Inspired by international precedents, these initiatives reinforce the application of the Paris Agreement and promote the transition to a low-carbon economy.
Challenges of Climate Litigation
Although climate litigation is a powerful tool, it faces significant challenges. Among the main ones are:
- Difficulty in measuring damages: The direct relationship between specific human actions and climate events can be difficult to prove.
- Technical complexity: Climate-related processes often involve complex scientific data, requiring the collaboration of experts.
- Political and economic resistance: Governments and businesses may be reluctant to implement significant changes due to high initial costs.
These challenges are not unique to any single country; they reflect the complexity of protecting the environment in an increasingly interconnected world. The intensification of global relations demands a robust legal approach that addresses cross-border issues and promotes shared responsibility for environmental damage, while respecting the specificities of each nation.
In this context, the role of international bodies and multilateral forums is essential to address these challenges. They play a crucial part in promoting cooperation between nations, uniting efforts and integrating legal, scientific, and economic knowledge to create effective and sustainable solutions.
To further this discussion, the article "The Challenges of Environmental Protection in a Globalized World ," available on the IDP Blog, analyzes the dynamics between globalization and environmental protection, also highlighting the fundamental role of lawyers and legal professionals in mediating conflicts and formulating more sustainable global policies.
How can law contribute to the transition?
The law has a robust set of tools that can act as catalysts in the transition to a low-carbon economy. These tools not only accelerate the process but also ensure that it is conducted legitimately, comprehensively, and without excluding essential steps. Among the available mechanisms, the following stand out:
- Environmental regulation: Establish clear standards for GHG emissions and encourage the use of renewable energy.
- Green taxation: Create tax incentives for sustainable companies and penalize polluting practices.
- Green contracts: Incorporate sustainability clauses into business and government contracts.
- Support for ESG initiatives: To encourage companies to adopt practices aligned with ESG criteria.
By aligning public policies and legal instruments, the law can create an environment conducive to the growth of a more sustainable economy.
The Connection Between Law, ESG, and a Low-Carbon Economy
Climate litigation is just one way in which law contributes to the climate transition. However, its impact goes beyond the courts, encouraging structural changes in companies and governments. By connecting law and ESG, incentives are created for organizations to take an active role in mitigating the climate crisis.
Companies that integrate ESG criteria into their strategies reduce risks and contribute to a more resilient global economy. This directly reflects a low-carbon economy, where sustainability is not just an obligation, but an opportunity for growth.
Final Words
The transition to a low-carbon economy requires a collective effort, in which law plays an essential role. Through climate litigation, environmental regulation, and the promotion of ESG practices, it is possible to create an environment conducive to mitigating climate change and promoting sustainable development.
For lawyers, business leaders, and public administrators, understanding the role of law in the climate agenda is essential to facing the challenges of the 21st century. After all, building a sustainable future depends on concrete and collaborative actions across all sectors of society.
Want to understand more about the impact of ESG and Law on the transition to a sustainable economy? Discover the MBA in ESG and Transition to a Low-Carbon Economy in the Public and Private Sectors at IDP , where you'll learn from experts how to shape the future of climate governance!
References
WEDY, Gabriel Tedesco. The 'Urgenda case' and lessons for climate litigation in Brazil. Conjur, Jan. 2, 2021. Available at: https://www.conjur.com.br/2021-jan-02/ambiente-juridico-urgenda-licoes-litigios-climaticos-brasil/.
TEIXEIRA, Izabella; TONI, Ana. The environmental-climatic crisis and the challenges of contemporaneity: Brazil and its environmental policy. CEBRI-Revista. Policy Papers, no. 1, Jan.-Mar. 2022. Brazilian Center for International Relations. Available at: https://cebri.org/revista/br/artigo/21/a-crise-ambiental-climatica-e-os-desafios-da-contemporaneidade-o-brasil-e-sua-politica-ambiental.
