Nature-related law cases focused on rights and corporate responsibility are set to increase in the next few years, the Network for Greening the Financial System (NGFS) said on Tuesday in a report.

For the first time, the influential NGFS has analysed key emerging trends in law cases related to biodiversity loss, deforestation, ocean degradation, carbon sinks, and plastic pollution.

“While strategic nature-related litigation is still in its infancy, the NGFS anticipates that the number of nature-related cases will continue to grow,” it said.

“It can be expected that the nature, scope, and addressees of nature-related legal actions will evolve, taking inspiration from successes in respect of climate-related litigation and benefiting from increasing awareness of the nature crisis.”

The number of rights-based nature cases against states and public entities may increase in the next few years, it said.

This trend might gain traction relatively quickly because of the actions of those already experienced in climate-related cases, combined with the growth of science-backed information about the climate-nature nexus, it said.

Corporate responsibility cases, which aim to establish corporate and financial responsibility for nature degradation may also grow, NGFS continued.

“Like for climate-related litigation, a potential trend may emerge in respect of claims arising from company law, such as shareholder actions against directors for breaches of fiduciary duties.”

Two legal opinions have said directors could face nature-related litigation risk under corporate law over the last year, those in Australia and the UK, both documents commissioned by investment and advisory firm Pollination.

“Furthermore, the NGFS expects a potential intertwining of nature-related litigation with the development of nature-related legislation, especially in areas such as corporate sustainability due diligence, green claims, and greenwashing,” the network said.

Nature-related cases against companies are likely to have far-reaching consequences on firm value regardless of success, it said.

“Such litigation can impact not only the specific company in question, but also other companies within the same sectors, the financial institutions that support them, and the broader financial system.”

NGFS, which aims to develop recommendations for banks worldwide, has over 130 central bank and financial supervisor members with direct influence over national policies.

RIGHTS-BASED CASES

The group flagged three types of nature cases against states and public entities that sought to show environmental impacts had affected different kinds of fundamental rights:

• Right to a healthy environment
• Rights of Indigenous communities
• Rights of nature

Around 100 countries have constitutional protection over the environment. Law cases on nature have taken place in countries including Mexico, Colombia, the Philippines, Finland, Norway, and Pakistan.

A number of cases have been grounded in the rights of Indigenous communities to informed consultation or consent in the US, Brazil, Colombia, Ecuador, and New Zealand.

The rights of nature movement has been particularly prominent in the US, though rights for ecosystems have also been granted in Brazil, Uganda, Mexico and the UK. In 2008, Ecuador became the first sovereign state to enshrine the rights of nature in its constitution.

CORPORATE RESPONSIBILITY CASES

The NGFS has identified several cases filed against companies and financial institutions, challenging their role in ecosystems impacts through their supply chains.

Types of corporate responsibility cases include:

• Corporate sustainability due diligence legislation
• Civil wrongdoing
• Shareholder rights
• Anti-money laundering legislation

Three nature-related cases based on environmental and human rights due diligence legislation in France are pending, the NGFS said. These relate to supermarket chain Casino, financial institution BNP Paribas, and food producer Danone.

NGFS recommended financial institutions closely monitor developments in the field. The nature litigation report follows the NGFS publishing two documents on climate-related litigation last year.

By Thomas Cox – t.cox@carbon-pulse.com

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