7 minute read | April.26.2024
The recent decision of the European Court of Human Rights (ECtHR) in the matter Verein Klimaseniorinnen and others v. Switzerland [1] has attracted significant media interest. The judges found that Switzerland had not fulfilled its obligations under the European Convention on Human Rights (ECHR) to establish a sufficiently robust legislative and administrative frameworks for protecting its citizens from the impact of greenhouse gas (GHG) emissions. So, what implications does this ruling have for future climate change disputes?
Environmental activists have claimed a moral victory, as the ECtHR endorsed many of their factual and legal arguments on climate change responsibilities and stretched its competence to grant substantial importance not only to the ECHR but also to international agreements, such as the Kyoto Protocol and the Paris Agreement.
However, the immediate impact is limited. The decision only has a declaratory effect, reflecting on Switzerland’s legislative framework on a specific date in the past.
The EctHR acknowledged the wide discretion of legislators to determine the appropriate rules and refrained from dictating any particular measures or deadlines for the Swiss government (or any other ECHR member state).
Courts and public authorities dealing with administrative issues may consider this decision when assessing the level of protection granted to applicants in climate change matters. For example, residents affected by traffic emissions from a nearby road might invoke the health-related arguments addressed by the ECtHR.
The fast-evolving case law on climate change issues creates significant legal uncertainty for corporations and especially for high CO2 emitters, regardless of the industry. Environmental activists are no longer focusing purely on energy companies but extend their gaze to include other sectors like banking and finance.[2]
Although this case only considered the obligations of one member state to the ECHR, many of the arguments employed could also serve as a steppingstone for an increase in climate litigation elsewhere based on corporate due diligence obligations. For example, the ECtHRʼs determination that an organization also can be considered a victim of climate change effects may diminish the relevance of procedural defenses for corporations.
Judges within the EU are becoming increasingly adept in climate change matters and demonstrate that they are prepared to delve into the specifics of each case. The Paris Court of Appeal, for example, has established a specialized chamber handling Corporate Social Responsibility (CSR) cases.[3]
EU legislators have been at the forefront of incentivizing investments into climate-friendly technologies through the Green-Deal initiative, which targets a net-zero economy by 2050. In this framework, several instruments have been approved or are at the final stages of approval and address corporate Environmental, Social, and Governance (ESG) obligations, including
The latter was influenced by due diligence legislation in France[7] and Germany[8]. The EU’s Carbon Border Adjustment Mechanism[9] will also have an impact on corporates’ operations. This new legislation will certainly spur an uptick in corporate disputes, initiated by environmental activists and authorities alike. Simultaneously, authorities may themselves be targeted. The ECtHR’s ruling may provide interpretative guidance on the objectives of these regulations.
Commercial uncertainties are heightened because new markets, such as hydrogen, have yet to be established, which necessitates substantial investments into major infrastructure developments. The timing and magnitude of the required infrastructure is far from certain, which calls into question the expected return on investment. This ambiguity could lead to further disputes regarding the fair distribution of the imminent commercial risks among market players and regulators.
Once the aforementioned uncertainties are resolved through the settling of case law and the enactment of the current legislative initiatives, there are ample opportunities ahead due to new developing markets. One can safely assume the long-term trend will be an increase in sustainable investments.
Because the states will inevitably play a pivotal role in facilitating the enormous financial investments required for new infrastructure, there is a risk that bureaucracy will become increasingly burdensome. Consequently, there may be more administrative disputes in which certain arguments addressed by the ECtHR may come into play.
It remains to be seen whether the current decision will also play a role in Investor State Dispute Settlements (ISDS) where investors seek protection of their investments against state interference. A reassessment of the level of investor protection is in any event warranted after the EU Member Statesʼ coordinated withdrawal from the Energy Charter Treaty, which was proposed in July 2023 and confirmed by the EU Council in March 2024.[10] Furthermore, the European Court of Justice has denied access to arbitration for intra EU investments in a series of recent rulings.[11] However, it warrants mentioning that the freshly signed EU-Angola Sustainable Investment Facilitation Agreement (SIFA)[12] makes explicit reference to the Paris Agreement and the effective implementation of sustainable investments.
On 9 April 2024, the ECtHR rendered its judgment in Verein Klimaseniorinnen and others v. Switzerland. This is the first ECtHR-case addressing human rights violations originating from climate change impacts and related legislation that successfully passed the admissibility phase.
The case was brought before the Swiss courts and finally the ECtHR by four women and an association questioning the Swiss government’s compliance with, among other things, the Paris Agreement,[13] highlighting that women over 75 are particularly vulnerable to frequent and intense heatwaves. Through the Paris Agreement, member states have committed themselves to define national contributions to limit global temperature increases to well below 2°C, while also adapting to climate change. The applicants emphasized the state’s positive obligation concerning climate change, and especially the necessity for a compliant domestic regulatory framework and the fulfillment of the GHG reduction targets. Specifically, the applicants argued that:
The ECtHR agreed that Switzerland violated Articles 8 and 6 of the ECHR. It affirmed that these provisions encompass an individual’s right to be effectively protected by the state from the serious adverse effects of climate change. The ECtHR thereby enshrined the states’ positive obligation to establish appropriate legislative and administrative frameworks and to ensure their effective implementation. It deemed Switzerland’s existing laws, including adaptation measures and GHG emission reduction targets, inadequate.
The ECtHR explored the case law of various member states on climate change disputes. The judges thereby situate the current decision within a broader context and emphasized that it was not to be taken as a singular view but rather as an ongoing trend where courts increase pressure on states, administrative bodies, and corporations to enhance the efforts towards decarbonization.
The decision was issued amid the finalization at the EU level of the Corporate Sustainability Due Diligence Directive (CSDDD), which was amended at the Council level and is awaiting final approval in the upcoming EU Parliament session. This Directive requires large companies to progressively integrate a transition plan for climate change mitigation into their due diligence policies and risk management systems, aligning with the global warming limit set forth in the Paris Agreement. National Supervisory authorities will oversee compliance and impose monetary penalties proportional to the infringement and the company’s turnover.
[1] https://hudoc.echr.coe.int/eng?i=002-13649.
[2] Cases against financial institutions comprise for example the bank BNP Paribas based on its duty of vigilance under French law (https://climatecasechart.com/non-us-case/notre-affaire-a-tous-les-amis-de-la-terre-and-oxfam-france-v-bnp-paribas/ and https://climatecasechart.com/non-us-case/comissa%CC%83o-pastoral-da-terra-and-notre-affaire-a-tous-v-bnp-paribas/) or those against HSBC UK for its misleading ads omitting significant information on its contribution to its GHG emissions (https://climatecasechart.com/non-us-case/asa-ruling-on-hsbc-uk-bank-plc/).
[3] https://www.cours-appel.justice.fr/paris/creation-dune-chambre-des-contentieux-emergents-devoir-de-vigilance-et-responsabilite.
[4] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2017.130.01.0001.01.ENG&toc=OJ%3AL%3A2017%3A130%3ATOC.
[5] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022L2464.
[6] https://data.consilium.europa.eu/doc/document/ST-6145-2024-INIT/en/pdf.
[7] Loi n° 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre.
[8] Gesetz über die unternehmerischen Sorgfaltspflichten in Lieferketten (Lieferkettensorgfaltspflichtengesetz – LkSG) vom 16. Juli 2021 (BGBl. I S. 2959), see https://www.csr-in-deutschland.de/EN/Business-Human-Rights/Supply-Chain-Act/supply-chain-act.html.
[9] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2023.130.01.0052.01.ENG&%3Btoc=OJ%3AL%3A2023%3A130%3ATOC . More official information can be found at https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en.
[10] https://globalarbitrationreview.com/article/eu-council-approves-withdrawal-ect.
[11] Including the following judgments: Achmea in 2018 - https://curia.europa.eu/juris/document/document.jsf?text=&docid=199968&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=3444452), Komstroy in 2019 -https://curia.europa.eu/juris/document/document.jsf?text=&docid=245528&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=3444678) and PL Holdings in 2021 - https://curia.europa.eu/juris/document/document.jsf?docid=248141&doclang=EN.
[12] https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6136.
[13] https://unfccc.int/sites/default/files/english_paris_agreement.pdf.