Justice Philip Jeyaretnam: Keynote address delivered at the Courts in the Climate Crisis: Accountability and Action Conference

TOWARDS NET ZERO: LEGAL ASPECTS OF CORPORATE CLIMATE ACTION IN ASIA
NUS Asia-Pacific Centre for Environmental Law, EW Barker Centre for Law & Business, Commonwealth Climate and Law Initiative

17 October 2024

COURTS IN THE CLIMATE CRISIS: ACCOUNTABILITY AND ACTION

I.     Introduction

1.     Climate change is the most significant and urgent challenge humanity has ever faced. Unlike any other crisis in history, it threatens the very foundation of our collective existence. The Intergovernmental Panel on Climate Change has repeatedly warned that if global temperatures rise 1.5°C above pre industrial levels, the consequences will be catastrophic and potentially irreversible.⁽¹⁾ The scientific consensus is clear: human activities – particularly the burning of fossil fuels, deforestation, and other industrial or agricultural processes leading to heavy greenhouse gas (“GHG”) emissions – have significantly contributed to climate change, and any response to the crisis must include reducing or eliminating such activities. 

2.     Despite the scientific consensus, political efforts at arresting the problem have often been slow, inconsistent, and inadequate. In 2006, former U.S. Vice-President Al Gore said that in resisting climate change “[w]e have everything, save perhaps political will”.⁽²⁾ Nearly two decades later, political will remains elusive.

3.     Against that backdrop, courts of law are increasingly seen as the last line of defence against the poisoning of the planet. Litigation has seemingly become as important as lobbying political decision-makers. Judges are being asked to step in where politicians are seen to have failed. According to the latest UN Global Climate Litigation Report, less than 1,000 climate-related cases were filed across 24 jurisdictions in 2017; in 2022, over 2000 cases were filed in 65 jurisdictions, “with cases in the Global South particularly [having gained] new visibility”.⁽³⁾ 

4.     This phenomenon raises important questions. What should courts do to address climate change? What role can courts play? These are the questions I will explore in this keynote address.

5.     I begin by situating our responses to climate change within the context of modern constitutional systems and the separation of powers fundamental to them. The legislative and executive branches of government are politically accountable to their citizens in ways that judges are not. We expect them to respond to issues of collective significance, including problems that are multi dimensional and polycentric like climate change. The legislative and executive branches are equipped to negotiate solutions by consulting with experts and the general public; making necessary trade-offs; and formulating nuanced but effective policies. Exceptionally, in countries where these branches of government have appeared unable to act, some national courts have taken on the mantle of developing a public interest jurisdiction and jurisprudence aimed at addressing climate change. But even then, the judicial process, as I will explain, is not very well-suited for such a complex polycentric task.

6.     I then proceed to consider the situation where the legislative and executive branches of government are active and engaged. Singapore is an example of this situation. In this context, the judicial branch’s role is a secondary or facilitative one, but it is an important role nonetheless. The courts’ role is two-fold:

(a)   The first is to administer and enforce the laws passed by national legislatures. 

(b)   The second is to protect the public space for political participation and discussion, so that reasoned discourse has the best chance to achieve appropriate and effective solutions. In this way, the courts facilitate the formation and exercise of political will. Under this head, I will speak about climate disinformation and the court’s role in addressing it.

II.     Separation of Powers

7.     To understand the role of courts and judges in the broader fight for our climate, we first ask ourselves: what is the role of the courts in our constitutional settlement generally? The basic answer to this is that the courts interpret and enforce our laws, whereas the making of law itself is a matter for the legislative and executive arms of government. The separation of state power in this way is a tenet of modern constitutional theory, and it draws on two principles. The first is that those who make our laws should not be the same people who administer them. There must be a fair and independent avenue by which the law is applied equally to all its subjects, including lawmakers themselves. The second is that lawmaking is essentially an expression of democratic will. That is why judges (who are unelected and thus representative of no one) should not generally be in the business of making law.

8.     At a high level of abstraction, the separation of powers is conceptually tidy. The practical reality, however, is that judges have always been making law. When confronted with legal problems for which existing codes and statutes give no clear answers, judges are left to fill in the gaps by means of interpretation and inference. In areas governed by the common law, the rules are formulated, modified and abandoned by judges reasoning inductively from one case to another. Such creative activity reflects the normal operation of the judicial process. The system cannot function without it. This kind of law-making inherent in the common law method operates interstitially and incrementally. 

9.     But there are limits to this. Such judicial creativity takes precedent as its raw material and so never starts with a blank canvas. It is constrained by the focus of the courts on the case at hand. Judges typically hear only from the parties before them, and do not have the opportunity or the resources to consider broader implications in a sustained or systematic way. 

10.     At this point, one might legitimately ask: what is so objectionable about the courts stepping in where our politics have seemingly failed, especially where the consequences of that failure may well be our collective ruin? This view is natural, and superficially persuasive when society is faced with imminent and serious climate risks. However, the limitations of the judicial process counsel caution. There are two principal reasons for this.

A.     Judicial competence and the polycentricity of climate-related issues 

11.     Climate adaptation is deeply polycentric in nature. It engages a multitude of actors and their respective interests, all of which must be considered and weighed up to reach a solution that society will find broadly acceptable. Negotiating compromises of that sort is the purpose of the democratic process. The more complex an issue is and the more differences of impact on distinct groups any solution will have then the harder it will be to reach compromise. That is why policymakers acting in good faith and with all their best efforts may yet fail. But if politics may sometimes struggle to achieve a compromise, the courts will almost always lack the perspective and resources to craft a singular right answer.

12.     I would like to illustrate my point with two cases, the first of which comes out of India.⁽⁴⁾ It concerns the Great Indian Bustard, which is a beautiful but critically endangered bird found in the deserts of Gujarat and Rajasthan. These birds lack frontal vision, unfortunately, and there is evidence that a great number of them perish every year by colliding with overhead power lines situated in the deserts. So, in 2019, a petition was made to the Supreme Court of India for directions relating to the conservation of the species. The Supreme Court largely allowed the petition and imposed restrictions on the raising of new overhead power lines in some 99,000 square kilometres of desert. The court also ordered the undergrounding of existing overhead power lines in “priority and potential habitats” of the Great Indian Bustard. 

13.     Subsequently, the Supreme Court of India became aware of a key difficulty with its orders. Quite apart from the technical challenges and costs of compliance, the area subject to the prohibition contained the “lion’s share” of the area from which wind and solar energy could potentially be harnessed. Strict compliance with the prohibition would have made renewable energy projects in the desert technically and economically unfeasible.⁽⁵⁾

14.     The Supreme Court thus observed in a later judgment in the same proceedings that there was a conflict between two vital objectives, namely wildlife conservation and climate mitigation through renewable energy projects. It was also acknowledged that the appropriate response to that conflict involved environmental policy.⁽⁶⁾ In the event, the blanket prohibition on overground power lines was recalled pending its substitution by a more calibrated response, including establishing a commission for further study and reporting back to the court.

15.     My comments on this case do not derogate from how the Supreme Court of India has played a pivotal role in shaping the country’s environmental jurisprudence. India is probably the most celebrated example of a country in which judicial activism have been necessitated by an apparent incapacity of the other branches of government to respond effectively to certain public interest issues, including those that concern the environment. Scholars have observed that judicial intervention in this way has gained a measure of acceptance and support within India’s broader social and political culture.⁽⁷⁾ India, however, is an exceptional case and even then, their judge led responses to challenges of the day are not without difficulty.

16.     I turn now to the second case, which I think offers an interesting counterpoint to the first. This was a dispute between the Chilean Ministry of Mining and the Regional Government of Atacama. Chile is the world’s second-largest producer of lithium. Lithium mining is a hugely important driver of the country’s economic development, especially in present times when the resource is more coveted than ever for its applications in low carbon technologies. As part of a push to increase production, the Chilean Ministry of Mining began awarding contracts in 2021 for the exploitation of lithium resources through state-partnerships.⁽⁸⁾ 

17.     Most of Chile’s lithium reserves are situated in the arid salt flats of the Atacama Desert, and so the government’s policy would have led to heavier mining activities in the region. Faced with this, the Regional Government of Atacama brought a claim against the Ministry of Mining on grounds that the bidding process had been carried out without any consultation of local interests on the likely ecological and economic repercussions of intensified lithium mining. Those repercussions were said to include the depletion of scarce water supplies, land degradation, loss of culturally significant artifacts, human displacement, and damage to the local tourism industry.⁽⁹⁾ 

18.     The dispute made its way up to the Supreme Court of Chile and, as with the case of the Great Indian Bustards, it raised conflicting societal interests and objectives. The Supreme Court of Chile eventually nullified two contracts that had been awarded by the Ministry of Mining.⁽¹⁰⁾ However, it is important to note that those orders were made on grounds that the state was obligated to engage with affected communities as part of the bidding process – this, it had failed to do. The outcome was thus premised on the legality of the decision-making process rather than the merits of its outcome. This, I think, encapsulates the proper role of the courts in supporting (rather than usurping) the ordinary modes by which society makes collective decisions. The court focuses on ensuring that society’s agreement or understanding for making decisions – its constitutional principles and conventions – are respected.

B.     The limits of judicial remedies 

19.     The second problem with treating the courts as the vanguard against climate change is the fact that the judicial process only gets one to a limited range of remedies, none of which are particularly suited to addressing the problems at hand. Damages can compensate for specific harms, but they cannot restore lost ecosystems or reverse climate change. Declarations may perform a signalling function, but they generally offer very little by way of practical relief. Injunctions, among the most coercive of legal remedies, may prevent further harms, but such relief – if it is to be granted – must be clear, enforceable, and capable of being performed without continued judicial supervision. 

20.     It is not surprising that legal remedies are largely inadequate to the task of arresting climate change. The judicial process is, by design, reactive or backward looking in nature – it responds to problems that have already arisen or will shortly arise. The judicial process is also principally intended to culminate in the final resolution of a dispute, whether by a payment from one party to the other or by an order that one party do something within a specified timeframe. These properties of adjudication make it difficult to apply where climate change and mitigation is concerned, because the issues play out over long timescales and demand sustained monitoring, forecasting, and adjustment of responses.

21.     The limits of judicial remedies should not, however, be viewed as failings. Rather, they speak to the reality of what the courts are meant to be: institutions of law and not of governance. 

III.     Enforcing the law

22.     I now turn to the role the courts have in relation to enforcing the law. I consider four aspects in relation to climate change. One is the enforcement of climate laws and regulations. The second concerns corporate accountability, and specifically the duties of directors to consider the impact of climate change when making business decisions in the best interests of their companies. The third is the enforcement of legal obligations that the legislature has enacted to bind the executive. The fourth is where there are constitutional obligations bearing on climate change issues.

A.    Enforcing laws concerning emissions, pollution and other environmental standards

23.     Where laws have been passed concerning emissions, pollution and other environmental standards, the courts regularly consider and enforce such laws, both in prosecutions for breach of laws and regulations and in the context of civil litigation.

24.     A celebrated example is the decision of the Hague District Court in Milieudefensie v Royal Dutch Shell.⁽¹¹⁾ In that case, the gas and oil company, Royal Dutch Shell (“Shell”), was ordered to reduce (by end-2030) the aggregate annual volume of its CO2 emissions by at least 45% relative to its 2019 emission levels.⁽¹²⁾ 

25.     The court took as its starting point Article 6.162 of the Dutch Civil Code, which essentially ascribes delictual liability for any act or omission violating the unwritten rules of proper social conduct. In other words, Shell was obliged to pursue its commercial activities in a manner consistent with “generally accepted” standards of behaviour.⁽¹³⁾ The court then went on to consider various international instruments, as well as the magnitude and likely impacts of Shell’s CO2 emissions. The conclusion reached was that Shell’s unwritten duty of care to Dutch residents and the inhabitants of the Wadden region called for a reduction of the company’s CO2 emissions.⁽¹⁴⁾ I should say that the Hague District Court’s decision is currently on appeal, and a decision is expected sometime in November this year.

B.    Corporate accountability

26.     I move on to the topic of corporate accountability. The aid of courts has traditionally been sought in situations where one person is the custodian or manager of another’s money or property. An example of this is the enforcement of directors’ duties, as directors bear responsibility for the business of a company and the investment in it by shareholders. But how does this relate to climate change?

27.     Well, directors must act in the best interests of the company. So, given the climate crisis, it could, in principle, be a breach of duty not to have or implement a corporate strategy concerning climate risks that would impact the business of the company. Such risks would include the primary risk of climate-change events such as extreme weather and rising sea levels as well as the secondary risk of likely regulations aimed at mitigating climate change that would affect the company’s business. An independent legal opinion on nature-related risks and directors’ duties commissioned by Pollination Law and the Commonwealth Climate and Law Initiative was published earlier this year, and it explores these concepts in some detail.⁽¹⁵⁾ I highly commend it to this audience.

28.     To date, however, cases in which claimants have sought to hold directors responsible for their company’s alleged failure to deal with climate-change risks have not met much success. I illustrate this by reference to two such cases: 

(a)   The first is McGaughey and Davies v Universities Superannuation Scheme Ltd and Directors (“McGaughey”),⁽¹⁶⁾ which was a case where two university professors (who were members of a pension scheme) sought to bring legal proceedings on behalf of the pension trustee company against the company’s current and former directors. The directors were said to have breached their statutory duties by procuring the fund’s continued investment in fossil fuels without any adequate plan for divestment. 

(b)   In the second case, ClientEarth v Shell plc and others (“ClientEarth”),⁽¹⁷⁾  a non-governmental organisation holding only 27 shares in Shell sought leave to commence a derivative action against the company’s directors. The allegation was that Shell’s directors were in breach of their duties by failing to procure reductions in the company’s greenhouse gas emissions.

29.     It is a striking feature of both cases that they were thrown out at an early stage of proceedings. In McGaughey, leave to commence a derivative action was refused because the pension scheme members were unable to establish a prima facie case of loss to the company or themselves flowing from the directors’ alleged defaults.⁽¹⁸⁾ In ClientEarth, the judge felt that there was not even a prima facie case for saying that Shell’s directors had erred in managing Shell’s business generally, or its climate risks and responsibilities specifically.⁽¹⁹⁾  The judge also considered it obvious that ClientEarth was pursuing the action not to promote the company’s success but for collateral motives, which was another reason to disallow ClientEarth’s application for leave to commence a derivative action.⁽²⁰⁾ 

C.     Judicial review and the enforcement of governmental obligations

30.     As I explained earlier in this address, the courts play a vitally important role in ensuring that members of the executive act in accordance with the law. 

34.     The court agreed that the Swiss government had breached Article 8 (but not Article 2). It was observed that the protection of Article 8 had long been held to cover the “adverse effects on human health, well-being and quality of life arising from various sources of environmental harm and risk of harm”.⁽²⁵⁾ From there, it was a short step to the conclusion that Article 8 confers “a right for individuals to enjoy effective protection by the State authorities from serious adverse effects on their life, health, well-being and quality of life arising from the harmful effects and risks caused by climate change”.⁽²⁶⁾ More specifically, it was held that effective respect for the rights protected by Article 8 meant “[undertaking] measures for the substantial and progressive reduction of [member state’s] respective GHG emission levels, with a view to reaching net neutrality within, in principle, the next three decades”.⁽²⁷⁾ On the evidence before it, the court was not persuaded that the Swiss government had satisfied those obligations.

IV.     Protecting the public space for reasoned discourse

35.     I now turn to the second broad role that the courts play. This is their pivotal role in safeguarding public discourse, a cornerstone of democratic societies. Public discourse, encompassing free speech, open debate, and the exchange of ideas, is essential for informed citizenry and responsible governance. Courts traditionally act as guardians of this space, ensuring that freedom of expression is upheld while balancing it with other rights and interests. Since the advent of the Internet and social media, a new challenge has arisen to which the law and the courts should respond, namely disinformation. Public discourse is corrupted by disinformation and failure to address it deprives countries of the ability to reach political consensus and decisions, including or especially in relation to the climate crisis.

A.     Freedom of expression and democratic participation 

36.     One of the primary functions of the judiciary is to interpret constitutional provisions or laws that protect free speech. Courts must ensure that governments or private entities do not unduly infringe on this right. They often review laws that impose restrictions on speech, such as those concerning defamation, hate speech, or national security, and determine whether such limitations are justifiable in a democratic society, usually by reference to that country’s constitution.

37.     At the same time, courts must also protect individuals and communities from harm that can arise from unrestricted speech. This includes safeguarding people from defamatory, violent, or inflammatory language that can incite hatred or violence. In doing so, the judiciary balances competing interests: protecting free expression while maintaining social order and individual dignity.

38.     Through their judgments, courts help define the boundaries of acceptable public discourse. In fulfilling this role, they ensure that public discourse remains robust, but also responsible, thereby contributing to a healthy, functioning democracy.

39.     This brings me to the modern-day scourge of rampant disinformation. It is connected to the climate change crisis because of how disinformation has weakened efforts to mitigate or adapt to climate change, both within nations and at a global level.

C.     Corporate transparency: greenwashing and climate-related disclosure

48.     This brings me to another way in which the courts have been called upon to keep public discourse transparent and honest. Greenwashing, which refers to the misrepresentation by companies of their environmental practices or the sustainability of their products, has become a major focus of climate litigation. From a legal perspective, greenwashing is principally a matter of consumer protection rather than climate mitigation per se, even if it may be said that greenwashing “promotes false solutions to the climate crisis that distract from and delay concrete and credible action.”⁽³⁸⁾ 

49.     Earlier this year, the Grantham Research Institute on Climate Change and the Environment reported that claimants were successful in over 70% of the decided greenwashing cases it had reviewed:⁽³⁹⁾ 

(a)     In one case, the Dutch airline, KLM, was found to have promoted its services using vague or misleading descriptions of their climate neutrality.⁽⁴⁰⁾ The offending content included slogans like “CO2ZERO” and “sustainable aviation fuel”. This was all held to have been in contravention of the Dutch Unfair Commercial Practices Act, which the District Court of Amsterdam applied having regard to the specific guidelines on environmental claims previously laid down by the European Commission.

(b)     In another case,⁽⁴¹⁾ an Australian investment company, Vanguard, promoted an index fund as “Ethically Conscious” and comprising only securities that had been screened against ESG criteria when, in fact, only a small subset of those securities had been screened. As it were, the fund included securities from issuers that failed to meet the applicable ESG criteria. This was held by the Federal Court of Australia to be misleading or deceptive conduct proscribed by the Australian Securities and Investments Commission Act 2001.

50.     Adjacent to greenwashing is the issue of climate-related disclosure. Year on year, we are seeing more severe disruptions to global supply chains that are attributable in part (if not largely) to climate change. Climate change has also spurred huge changes to consumer behaviour and the regulatory landscape which businesses must adapt to if they are to survive. Companies face greater climate-related risks at every turn, and there a growing recognition that such risks must be disclosed and managed not as an afterthought, but as a core strategic priority. 

51.     Today, there are laws and regulations all over the world that variously mandate the disclosure of climate-related risks; strategies for managing climate related risks; strategies for achieving net zero; assessments of environmental footprints; methodologies used in assessing environmental footprints; and much else besides.⁽⁴²⁾ 

V.     Conclusion