Credit: iStockphoto

- Advertisement -

The big sleeper issue around climate change is litigation.

Already there are signs that investors, communities and non government organisations will be taking companies to court over their claims on the environment.

In Australia, we have recently seen the Australian Conservation Foundation writing (read the pdf here
to the Australian Competition and Consumer Commission asking it to investigate whether six companies - Rio Tinto, Woodside, Xstrata, Boral, Caltex and BlueScope Steel - had misled investors with their claims about the impact of the Australian Government's Carbon Pollution Reduction Scheme.

Then we have reports from America that there has been a rise in companies getting sued for greenwashing and making bogus claims about their products being environment-friendly. Lawyers say these sorts of claims are really a case of false advertising.

It’s not hard to see climate change triggering a spate of law suits. Consider these scenarios: a utility has a power blackout caused by a climate change-related event about extreme weather. The area is plunged into darkness and chaos, businesses lose a fortune and launch a lawsuit against the utility.

Or shareholders who sue a company for ignoring their resolutions calling on the business to tackle climate change. The plaintiffs might claim the company sat on its hands, and as a result the business was hit hard by climate change-related events, and the share price tanked.

Impossible? Think of the lawsuits taken out against tobacco and fast food companies. Think asbestos.

Indeed, we have a report(pdf here) from Insurance giant Swiss Re now warning that climate change litigation will develop faster than asbestos related claims.

If nothing else, this wave of litigation will be another reminder to companies that taking care of the environment is actually good business.