Abstract
Over the past two decades a global jurisprudential trend of domestic climate litigation against governments and companies has emerged. One avenue for litigation against these entities is tort law. The tort of negligence could provide access to compensation for aggrieved individuals and groups. Using the example of Australia, this article discusses whether the emergence of climate tort cases, an increasing drive to hold corporations responsible for climate change, and a company focus on voluntary climate action, could lead to the emergence of a new duty of care by corporate actors toward non-shareholders. We highlight opportunities and barriers to the further development of negligence law as a cause of action against corporations for harms related to climate change.
1 Introduction
Climate change litigation has grown exponentially around the world, including in Australia. A trend is emerging of civil litigants seeking to impose liability on governments and corporations for climate-related harm. Tort law is becoming a civil avenue that litigants rely on to instigate causes of action to evoke change and hold corporate entities and governments accountable for those harms.1 Tort actions, especially the tort of negligence, could provide access to justice and compensation for climate-related harm for aggrieved individuals and groups. In light of recent developments in case law, the article revisits the perception by judges2 and commentators3 of insurmountable hurdles in tort doctrine, to assess whether there exists an opportunity to capitalize on tort law’s ability to adapt to societal needs.
We focus on obstacles and opportunities to impose a new duty of care in Australia. While our argument is premised on developments in Australian law and is confined to a discussion of common law principles, it serves as an example of how the law may develop in other jurisdictions.
Climate change litigation has predominantly targeted governments,4 although increasingly corporate actors are being named as defendants for their substantial contribution to emissions.5 The Australian legal landscape reflects these two disparate streams of climate change litigation: actions against governments and government departments;6 and shareholder actions against corporations.7 One of the issues in cases of the latter kind has been whether a state or corporate actor owes a duty of care to a group of plaintiffs to mitigate climate change.
Australia’s ambition on climate change mitigation and adaptation policy has always been low. It is in this context that corporate action on climate change should be understood. Not limited to fulfilling legal responsibilities that might arise under voluntary participation in the Australian national Carbon Credits (Carbon Farming Initiative) Act 2011 or its mandatory safeguard mechanism,8 corporations are increasingly establishing voluntary commitments9 to mitigate climate change as a matter of corporate social responsibility and as a way of improving their reputation among the general population for being ‘environmentally friendly’.
This article considers whether three trends—an emergence of climate torts, an increasing drive to hold corporate actors responsible for climate change, and a company focus on voluntary climate action—can lead to the emergence of a new duty of care of a company toward its consumers/potential consumers or toward aggrieved members of the public (who are not shareholders of the company) for representations and commitments on climate change mitigation measures it has made. We examine whether existing duties of care in corporate law, including directors’ duties and corporate shareholder responsibility, can be extended to include tortious duties to mitigate climate change. While the imposition of a duty of care toward shareholders lies within the ambit of corporate law, here we are concerned with exploring the feasibility of extending a duty of care in tort law to non-shareholders. We highlight opportunities and barriers to the further development of negligence law as a cause of action against the environmental damage by corporations.
In Section 2, we review the emergence of climate tort litigation, both internationally and in Australia, including the creation and application of novel duties of care. In Section 3, we discuss the well-established corporate duties towards shareholders in corporate law and introduce the kinds of voluntary actions taken by corporations on climate change that form the building blocks of our analysis. Section 4 addresses Australian case law in which litigants have sought to create novel duties of care for climate-related harm. It is followed by a discussion of when and how new duties of care can emerge in tort law, setting out relevant elements of a duty of care and applying them to voluntary actions undertaken by companies. Section 5 considers the practical repercussions of imposing liability on corporations, in particular the risk that it leads to adverse effects, where a risk of litigation hinders voluntary commitments. Section 6 concludes that the growing body of climate change litigation presents an opportunity for legal actors to consider extending tort doctrine to address the problem of climate change.
2 Climate Litigation on a Duty of Care
Climate litigation is increasingly used strategically—to enhance governmental and corporate accountability and to effect policy change.10 In this context, climate litigation can play a crucial part in effecting mitigation, rather than being limited to providing compensation for adaptation inaction. Setzer and Byrnes’s 2019 analysis of climate litigation shows that about 80 per cent of cases aim to stimulate more effective climate mitigation action.11 In the following sub-sections, we outline advances made around the world in using tortious action in the climate context.
2.1 Litigation in Jurisdictions Other than Australia
The scholarly literature has considered the use of tort law as a tool to reframe the impacts on the causes of climate change.12 Ganguly et al. describe distinct ‘waves’ of climate-related tort litigation.13 Commencing in the early 2000s, the first wave targeted both companies and government departments, relying on a range of torts such as nuisance, negligence, and conspiracy actions.14 While courts did recognize the existence of harm from climate change, these early attempts mostly failed to meet procedural thresholds of standing and jurisdiction or substantive thresholds of causation and damage.15 A second wave of climate litigation, from 2015 onward, has sought to hold so-called ‘carbon majors’ responsible for climate-related harm.16 In this period, courts have become more amenable to apportioning climate liabilities to individual companies, informed in part by more exact climate science.17 For instance, Ganguly et al. refer to the case of Lliuya v. rwe,18 where the Regional Court of Essen (at first instance) rejected the plaintiff’s claims on the basis that the complexity of climate change made it difficult to satisfy the causation requirement. On appeal, the Higher Regional Court of Hamm agreed to hear expert evidence on the issue. The matter remains ongoing.19 Still, a recent analysis of cases from around the world (both common law and civil law jurisdictions) has revealed that plaintiffs seeking compensation for harm sustained by the plaintiff because an entity (the defendant) contributed to the causes of climate change and the harm sustained allegedly was from climate change as exacerbated by that impugned contribution had ‘failed to demonstrate that their injuries would not have occurred in the absence of defendants’ emissions’.20
While the overall success for plaintiffs of the ‘second wave’ is yet to be fully evaluated, novel litigation strategies are being pursued to overcome past obstacles.21 In the Urgenda litigation,22 the Supreme Court of the Netherlands23 upheld earlier decisions that the Dutch government had a duty of care toward its citizens to reduce greenhouse gas emissions.24 It evidences the development of actions brought against governments for their role in climate change.25
In comparison, actions against corporate actors have been slow to emerge. In 2021, in the Shell case, the Hague District Court found that Shell had a duty of care to reduce emissions from its operations and products.26 The decision is under appeal.27 The aforementioned Lliuya case, still in progress, targets Germany’s largest electricity supplier for its contribution to global warming.28 The plaintiff in that case claims that rwe should compensate him for a percentage of the damages he allegedly has suffered, or will suffer, from climate change, proportionate to the company’s contribution to greenhouse gas emissions since the beginning of industrialization. In the New Zealand case of Smith v. Fonterra,29 the plaintiff brought a claim against a group of high-emitting companies, alleging that the defendants’ contributions to climate change constituted a public nuisance, negligence, and a breach of a novel duty of care to cease contributing to climate change. The case was dismissed by New Zealand’s Court of Appeal. Its reasons included that climate change is an issue requiring a legislative response. The decision is under appeal.30
2.2 Australian Litigation
Australia has had a relatively high number of climate litigation cases.31 Until recently, most of them had been limited to the judicial review of governmental approvals of coal mines or coal-fired power stations.32 However, legal action is building to connect climate change to directors’ duties and shareholder responsibilities. Litigation exists at all stages of proceedings, including litigation that has recently been initiated, is awaiting determination, or has been recently decided.33 This includes the notable recent case of McVeigh v. Retail Employees Superannuation Trust (rest),34 in which a pension fund member took legal action against a fund for failing to consider climate risks in investments and for failing to implement a net-zero carbon footprint goal. In reaching a settlement prior to trial, the fund agreed to implement the net-zero target by 2050. In Abrahams v. Commonwealth Bank of Australia (cba),35 an ongoing case, shareholders initiated action to obtain documents from a bank to verify the alignment of the bank’s investment projects with the Paris Agreement.
Few climate cases have been brought in tort law so far. In the case of Sharma v. Minister for the Environment, a judge of the Federal Court of Australia in the first instance determined that the Federal Minister for the Environment owed Australian children a duty of care. The decision was overturned by the full Federal Court. In another tort case, Pabai v. Commonwealth Government of Australia,36 inhabitants of the Torres Strait Islands are seeking a declaration that the government owes them a duty of care to protect them, their customs, and the environment of the islands from the impacts of climate change. The Statement of Claim specifies that the claimants have suffered, and will continue to suffer, loss and damage relating to degradation of the land and marine environment, including fauna, flora, and coral reef systems; loss of ‘Ailan Kastom’;37 and loss of Native Title rights. Further, the claimants allege that the defendants’ breach of their duty of care will continue to cause an increase in greenhouse gas emissions and ‘a material contribution to the impacts of climate change’. Finally, the claimants allege that the defendants’ breach of duty will cause the claimants individually physical and psychological injury. Hence, this case is a combined causes and impacts case, where the claimants are seeking a remedy that responds to impacts and seeks to suppress future causes. While the cause of action in Pabai is, as in Sharma, against the Australian government rather than a corporation, it nevertheless is an instance of a group impacted by climate change seeking to rely on tort law for a remedy.38
In Sharma, the unanimous verdict and detailed reasoning of the Court of Appeal of the Federal Court of Australia abruptly checked the momentum generated by the trial judgment in the case. In the reasons given by the Chief Justice of the Federal Court, the purported duty of care related to ‘core government policy’,39 which, in Australian law, is not a topic for the judiciary. The imposition of the duty would be inconsistent and incoherent with the purpose of the legislation controlling the minister’s decision in the case. Moreover, considerations of indeterminacy, a lack of special vulnerability, and a lack of control by the minister, were all factors that did not support the imposition of a duty.40 The Chief Justice referred to the difficulty of determining the question of a novel duty when elements of negligence pertaining to ‘breach, causation and damage have not yet arisen, let alone been determined’.41 The Court of Appeal’s decision raises the question of whether it sets a precedent that would hinder the success of plaintiffs in cases such as Pabai, unless they are able to distinguish their claims in the nature of the relief sought, namely loss or damage already sustained rather than injunctive relief for projected future harm.42 A plaintiff who can provide evidence of harm sustained through a corporation’s failure to comply with voluntary commitments of climate mitigation may be able to bypass some of the restrictions in the Sharma Appeal Decision. Further, an action against a private defendant potentially sidesteps the restriction on interference with core government policy. The case of Sharma v. Minister for the Environment, will be revisited in more detail in Section 4.
3 Corporate Law and Climate Change in Australia
With the barriers that Sharma has erected against holding governments accountable in negligence to mitigate climate change, can tort law instead be used as a vehicle to impose duties on corporate actors for failure to live up to mitigation commitments?43 As foreshadowed above, part of the developing trend of climate litigation in Australia involves actions taken by shareholders against corporations based on directors’ duties to shift business ‘capital and resources more quickly away from fossil fuels and towards clean energy practices’.44 A body of litigation is building, with various actions taken against corporations for climate-related causes of action.45 To date this body of law has been squarely based on directors’ duties and obligations, such as information disclosure, that are well developed in corporate law. However, Hutley and Hartford-Davis caution that it is ‘no longer safe to assume that directors adequately discharge their duties simply by considering and disclosing climate-related trends and risk’; they ‘must also take steps to see that positive action is being taken’46 by a company to mitigate its contribution to climate change and the impact of climate change on its business.
The next section considers how these duties provide a context to applying the law of torts to corporations in relation to climate change. In Section 3.1, we argue that the application of existing corporate law duties available to shareholders indicate the growing expectation that corporations are accountable for climate-related harm. Nevertheless, extending existing corporate law duties to benefit non-shareholders is unlikely. Therefore, in Section 3.2, we explore whether the mitigation activities voluntarily adopted by corporations could provide an alternative avenue under which liability could be pursued, based in the tort of negligence.
3.1 Existing Corporate Duties Linked to Climate-related Harm
The current legal framework for holding corporations accountable for their contribution to climate-related harm in Australia relies on what scholars such as Foerster describe as ‘corporate law tools’.47 These are the duties established in the Australian federal Corporations Act 2001 and associated regulations in the area of corporate law. They include duties owed by directors and officers to shareholders,48 duties to disclose connections to climate change of company assets and activities,49 and the ability of certain shareholders to put resolutions to company meetings.50
In the first place, company directors and officers51 have positive obligations under the Corporations Act to guide and monitor the management of the company. This includes exercising their powers and discharging their duties with the degree of care and diligence that a reasonable person would exercise in their position, having the knowledge, power, and duties of that director or officer, in the company’s specific circumstances;52 and acting in good faith in the best interests of the corporation.53 Equivalent duties are placed on the directors of corporate trustees of superannuation funds.54 Obligations owed by directors and officers of corporations are owed to the company itself (including its shareholders), whereas obligations owed by directors of corporate trustees are owed to the beneficiaries.
To date, climate change litigation based on an alleged breach of directors’ or officers’ duties55 has been based on a failure to identify and manage the risk that climate change poses to corporate performance and value.56 According to Huntley and Harford-Davis, climate change risks ‘can and should’ be considered by company directors57 and directors of corporate trustees58 to the extent that those risks ‘intersect with the interests of the company … ranging from the emergence of a corporate opportunity to the perception of a foreseeable risk of harm’.59 While this duty presently is to the corporation and to its shareholders, the same duty might be extendable to future stakeholders in accordance with the principle of intergenerational equity. Intergenerational equity recognizes the need to balance the rights of the present generation with those of future generations.60 The ‘perpetual nature’ of a corporation suggests an argument that if a director or officer has a duty to consider the impact that future climate change could have on the corporation and its shareholders, the duty also extends to the corporation and its shareholders at that future time.61
Second, corporations must disclose and report on a range of issues to satisfy the requirements of the Corporations Act, the asx Listing Rules,62 and the asx Corporate Governance Principles and Recommendations.63 These include obligations to lodge a director’s report64 and report on the corporation’s financial position and future financial prospects.65 Corporations that issue superannuation products must disclose information upon request to enable a member to make an informed judgment about the management, financial condition, and investment performance of the fund.66
According to the Australian Securities and Investments Commission (asic), because climate change is now regarded as a foreseeable risk, listed corporations need to understand and continually reassess risks associated with climate change—whether existing, emerging, long-term, or short-term—connected to their business.67 In this context, asic recommends that disclosures to investors relating to climate change should be specific68 in terms of the source of risk and its impact on the corporation. The Taskforce on Climate-related Financial Disclosures (tcfd) recommends69 that businesses disclose climate-related financial information on both ‘transition risks’ connected to the transition of a country to a low-carbon economy70 and ‘physical risks’ to the business arising from the physical impacts of climate change.71
The importance of disclosing climate-related risks and opportunities, as recommended by tcfd, has played out in the Australian courts. In the cases of McVeigh v. rest and Abrahams v. cba, action was taken against the Retail Employees Superannuation Trust and the Commonwealth Bank of Australia for failing to disclose information regarding the financial risks that climate change posed to their businesses in accordance with disclosure obligations under the Corporations Act.72 In McVeigh the claim arose after a request by a beneficiary of the superannuation fund for general information was refused.73 The claim was settled extrajudicially in November 2020, when rest agreed to incorporate climate change financial risk into investment decisions and implement a net-zero carbon footprint goal by 2050. In Abrahams, the claim arose after two shareholders made a request for information about cba’s reported involvement in fossil fuel projects,74 in the context of the cba’s Environmental and Social Framework and Environmental and Social Policy.75 These articulated how the cba’s lending policies supported the ‘responsible transition to a net zero emissions economy by 2050’.76 cba was ordered to produce certain documents to the plaintiffs for inspection by early 2022.77 The case is ongoing.
Third, shareholders have the capacity to put forward resolutions to be moved at a general meeting.78 Growth in shareholder activism increases pressure on corporations to disclose, and actively respond to, the risks that climate change poses to the corporation.79 However, until companies are required by statute to make disclosures to shareholders (or others) about climate-related harm, or until this is written into a company’s constitution, shareholders will be limited in the information that they can have disclosed by putting resolutions to a general meeting.80
While the above directors’ duties and obligations of information disclosure arising from the Australian Corporations Act and related legislation provide a robust framework through which shareholders (and superannuation fund beneficiaries in the case of McVeigh) can seek to hold corporations, their directors, and officers, accountable for some issues of climate-related harm, the same framework creates a hard boundary that prevents these mechanisms from being used outside these categories. For a corporation to be held accountable to the wider public for climate-related harm, liability must be pursued via a different route.
3.2 Voluntary Mitigation Activities: Self-created Corporate Duty
Corporate Social Responsibility (csr) has provided a vehicle through which corporations have been made to consider the social and environmental consequences of their business activities. Over the past fifteen years there has been a growing expectation that the business strategies of Australian companies will not only include csr programs, but also that these programs will promote activities and actions to promote environmental sustainability, as part of their ‘triple bottom line’.81 As climate-related harm has continued to grow as a key issue for business, the csr concept of environmental sustainability has been transformed into specific goals around climate-related harm. It is now not uncommon for corporations to adopt voluntary targets, or to agree to undertake voluntary actions, in relation to how their businesses impact, and are impacted by, climate change. Being voluntary, these go beyond the mandatory activities that a corporation may be required to undertake in relation to greenhouse gas emissions and energy reporting,82 renewable energy consumption,83 or participation in Australia’s Emissions Reduction Fund.84 Corporations appear to be relying increasingly on these actions to bolster their reputation as a ‘good corporate citizen’ in a way that impacts consumer choice.
The kinds of targets or actions connected to climate-related harm that are voluntarily adopted by corporations are wide and varied. In August 2021, the Australian Council of Superannuation Investors (acsi) reported on the management of exposure to climate risk and pursuit of low-carbon strategies and opportunities of the 200 largest asx-listed companies. It provided examples of best practice and of gaps in climate-related reporting to investors.85 Based on a comprehensive review of annual reports, sustainability reports, tcfd reports, and company websites of the asx200, the acsi reported the adoption of voluntary commitments,86 ranging from ‘net-zero’ emission targets (49 companies),87 alignment with ‘Paris Agreement pathways’ (18 companies),88 emission-reduction or decarbonization targets (94 companies),89 and reporting of indirect ‘Scope 3’ emission targets (15 companies).90 The acsi also reported that 62 companies had disclosed or reported on the extent to which the company was resilient to the transition to a low-carbon economy;91 and 36 companies had undertaken a detailed analysis of whether company assets and operations would be physically exposed to climate-related harm.92
For example, such companies as the Coles Group,93 Woolworths,94 Toyota Australia,95 and cba96 have made representations and promises and announced targets to mitigate climate change associated with their business activities. Both Coles and Woolworths have goals to reach ‘net-zero’ or ‘net-negative’ emissions by 2050. All four companies have specific targets to reduce greenhouse gas emissions from various base years.97 A target to achieve 100 per cent renewable energy is also common. Coles and Woolworths have committed to achieving such a target by the end of June 2025 through purchase agreements and onsite solar. The Commonwealth Bank intends to achieve 100 per cent renewable energy consumption by 2030. Commitments are also made to increase asset resilience in the supply chain, improve the environmental rating of properties, increase the use of electric vehicles in vehicle fleets,98 produce new low- or zero-emission vehicles,99 and reduce the average emission intensity across the business lending portfolio.100 Commitments have also been made by companies whose business activities directly relate to climate change. For example, the Australian mining company bhp has committed to an emission-reduction target of 30 per cent below 2020 levels by 2030, reaching net-zero operational emissions by 2050.101
Such commitments, rather than being directed to shareholders or beneficiaries, are being broadly publicized to the public as consumers. The voluntary commitments are often bundled up with more general corporate objectives, such as the intention to become the ‘most trusted retailer in Australia and … to sustainably feed all Australians to help them lead healthier, happier lives’ (Coles Group)102 or a recognition that climate change is a key ‘concern for our customers and other stakeholders’ (Toyota).103 Climate change has also been used by corporations to generate a narrative of authority and leadership. In November 2021, the cba announced a new partnership with the Commonwealth Scientific and Industrial Research Organisation, claiming ‘we believe our collaboration with the csiro will better inform our approach on how to play a leadership role in supporting Australia’s transition to a more sustainable economy’.104
In Australia, a world-first action by a consumer group filing proceedings in the Federal Court is testing whether climate-related promises could amount to misleading and deceptive conduct under the Corporations Act and Australian consumer law.105 Causes of action in torts, particularly negligence, could provide another framework within which a corporate duty relating to climate change could be recognized. Scholars have highlighted the need to reform corporate law by introducing a corporate duty of environmental care.106 The proposed duty would mirror the tort of negligence by requiring corporations to take steps to avoid harm to others, and would impose on corporations mandatory reporting and disclosure obligations regarding environmental harm.107 Reform and implementation would require a ‘shift away from shareholder-centric models of corporate governance towards a broader stakeholder-oriented model, requiring corporations to act in the public interest and in a manner that is socially and environmentally responsible’.108
The next section discusses existing case law which may hold an opportunity to expand existing duties of care in relation to government action. It then explores the possibility of extending a duty of care in negligence to corporations and their voluntary actions to take steps to reduce foreseeable environmental harms.
4 Is Tort Law an Option?
Based on a growing number of cases by shareholders against corporations for climate-related harm under directors’ duties and obligations of information disclosure, there is an argument for corporations to be made more generally accountable for climate change, including to the general public in relation to their promises of climate mitigation. This section considers how tort law principles could be applied to corporations to establish a duty of care in this context. While a corporation can be held legally and financially accountable for climate-related harm in negligence only if the elements of breach and causation are established, the recognition of a duty of care is a necessary first step. In Section 4.1 we introduce the Sharma decisions which assessed whether and how a novel duty of care could be established between a government entity and Australian children in the context of climate change. The trial judge, Justice Bromberg, finding such a duty, based his analysis on the Australian doctrine of the ‘salient features’. The Appeal Court clarified the role of the salient features approach in the context of finding a novel duty of care, although ultimately the court found that a duty did not exist once the salient features were considered in the circumstances created by the parties’ relationship. Section 4.2 examines the salient features likely to be the most contentious when applied to corporations—reasonable foreseeability, control, vulnerability, and indeterminacy—in light of the Sharma Appeal Decision.
4.1 Overview of the Sharma Litigation
Australian courts have recently grappled with questions of whether a government minister can be held liable in tort law to Australian children for contributing to the causes of climate change, leading to personal injury to the children from climate change. The appeal decision in the Sharma case sheds light on the judiciary’s hesitation to impose a duty of care in this novel context. The Sharma Appeal Decision has created barriers for climate change litigants seeking to rely on the tort of negligence for climate-related harm. The decision highlights key obstacles, including matters pertaining to justiciability, causation, and foreseeability of harm that would need to be satisfied in future claims. With a view to analysing how existing tort law principles might extend to a claim against a private corporate defendant (as distinguished from a governmental defendant), this section discusses both the trial and appeal decisions and the limitations set by the Court of Appeal.
The plaintiffs in the case were eight Australian children who brought their action, through a litigation representative, on their own behalf and as representatives of ‘children who ordinarily reside in Australia’. In 2016, an application had been made to the Commonwealth Minister for the Environment to extend a coal mine (the Vickery mine). The plaintiffs claimed that the defendant minister owed them a duty of care under federal environmental legislation, the Environment Protection and Biodiversity Conservation Act 1999 (epbc Act), pursuant to which the minister was due to decide the extension application.109 They also sought an injunction to restrain an apprehended breach of that duty by the minister in her making of that decision.110 The plaintiffs claimed that the minister owed each of the children a duty to exercise her ministerial power with reasonable care so as not to cause them harm from climate change. They argued that the duty of care arose because of the existence of a legal relationship between the minister and the children recognized by the law of negligence.111 The harm from climate change claimed by the children pertained to mental or physical injury, including ill-health or death, as well as economic and property loss.112
Justice Bromberg, at trial, acknowledged that the plaintiffs were requesting the court to find a duty of care in ‘novel’ circumstances.113 In finding that the duty existed, the judge made use of ‘a multi-factorial assessment in which considerations (salient features) relevant to the appropriateness of imputing a legal duty upon the putative tortfeasor are assessed and weighed’.114 As outlined by the High Court of Australia in Sullivan v. Moody,115 the ‘salient features’ analysis represents a methodology adopted by Australian courts when establishing a novel duty of care between the parties to a case. It involves an assessment of the relationship between the plaintiff and defendant by reference to certain ‘features’ of the case, in order to assess whether a legal duty may be imposed.116 The salient features were systematized in the Caltex Refineries case117 into a list of seventeen salient features, although the list is not exhaustive.118 Not all seventeen features need to be considered, only the ones ‘relevant in the circumstances of the particular case’.119
Justice Bromberg stated that where a duty is owed by a statutory authority, four salient features120 are particularly relevant: (i) purpose to be served by the statutory authority’s power; (ii) control (in this case, the minister’s direct control over the foreseeable risk, as the creation of the risk depended on her exercise of the power);121 (iii) vulnerability (the children’s vulnerability to the harmful effects of climate change as connected with conduct by the minister which exposed them to such a risk);122 and (iv) coherence (consistency with other legislation and public law principles).123 The trial judge noted that the issue of reasonableness is at the heart of negligence and must be judged according to current community standards.124 He acknowledged the social-justice aspects of the case, stating that ‘the law is being asked to respond to altering social conditions brought about by human interference to [sic] the natural environment.’125
Ultimately, the trial judge found that it was reasonably foreseeable that a risk of climate-related harm would arise from the emissions from the mine’s extension,126 that the minister had control over that risk through her decision on whether to approve the extension,127 and that Australian children were a vulnerable category.128 With regard to the finding of a recognized relationship, the judge found that factors such as risk, vulnerability, and reliance supported the finding of a relationship. He stated that ‘there is a relationship between the government and the children of the nation, founded upon the capacity of the government to protect and upon the special vulnerability of children’.129 He found the duty to extend to personal injury and death, but not to property damage or pure economic loss. The judge issued a declaration on the existence on the novel duty, but he did not grant an injunction, as it would have related to an ‘apprehended breach of a duty of care’ about which there was no evidence.130
On appeal, the Full Court unanimously reversed the trial decision. It held that imposition of a novel duty of care requires a consideration of the salient features as ‘the frame of reference through which existing relationships, situated within their broader social and legal context, are to be examined’.131
The central error of the primary judge [was] to construct the duty by individual analysis of salient features commencing with the risk of harm, assuming the matters thrown up by the duty were suitable for judicial determination as in any other tort case.132 …
The relationship [between the parties] is not one built by the salient features. Rather, the salient features play their part in considering the relationship and the question of the appropriateness of the imposition of a legal duty of care as the necessary foundation for the potential personal liability of the person to the injured party for damages as a consequence of the impugned act or omission in question.133
be assessed through the prism of the statute with the result that it is primarily by reference to the legislation that the issue in this appeal is to be resolved. The prominence in this case of the provisions of the legislation in determining whether a duty of care is to be recognised renders incremental reasoning, and reasoning by analogy, of much less relevance than they might be in other cases.135
In the Appeal Decision, the court found that the epbc Act, under which the minister’s decision would be made, did not give rise to a relationship between the parties which would support the recognition of a duty. The Chief Justice held that the framing of the putative duty involved core policymaking considerations that were not suitable for judicial determination.136 He highlighted that the relationship between the minister and the public arising in this case was a political duty, not a legal one.137 Justice Wheelahan, too, stated that the nature of the issues at hand were political considerations, ‘inappropriate for judicial resolution’.138 All judges reassessed the salient features. The Chief Justice addressed the salient features in light of the relevant statutory power, finding that ‘considerations of indeterminacy, lack of special vulnerability and of control … make the relationship inappropriate for the imposition of a duty’.139 Justice Beach, the third judge, stressed that imposing a duty of care in the circumstances of the case could lead to indeterminate liability.140 He concluded that a lack of sufficient closeness and directness, and a prevalence of indeterminacy as a ‘powerful salient feature’, were factors that went against the imposition of a duty of care.141 Justice Wheelahan also held that it was not reasonably foreseeable that approval of the project would cause personal injury to the children.142
The Sharma Appeal Decision impacts our argument from two key perspectives. First, it confirms that a duty of care must be assessed within the parameters of the relationship that exists between plaintiff and defendant. Second, it provides close analysis of some of the more contentious salient features that are relevant to the creation of a duty of care in the context of climate change.
Regarding the former, it is important to reiterate that the parameters of the relationship will be unique to the parties, and therefore that a case-by-case approach is required to the assessment of any novel duty. While the parameters of the relationship between corporations and their shareholders are clearly established by the Corporations Act, this is not the case between corporations and non-shareholders. In some cases, the defendant corporation and plaintiff non-shareholders may have a direct relationship as retailer/consumer. If a plaintiff purchases goods or services from the corporation in reliance of the voluntary mitigation activities committed to by the corporation, misleading and deceptive conduct may be a prevalent consideration when determining whether a duty of care exists. However, a defendant corporation and plaintiff non-shareholder may also have an indirect relationship, as a potential consumer, as an individual to whom the corporation publicizes or advertises its voluntary commitments to, as part of the wider population. Analysis of the specific relationships between corporations and non-shareholders in which a court might find that a duty of care exists is outside the scope of this article. Nevertheless, perhaps given the plethora of possible relationships, it may be that one is determined as a matter of policy.
Accordingly, the following section considers those salient features that will likely be considered and applied by a court to the relationship between a corporate defendant and a non-shareholder plaintiff, assuming the relationship is one in which a duty of care might arise. Specifically, the features discussed below include reasonable foreseeability, control, vulnerability, and indeterminacy.
4.2 Tort Law’s Ability to Cater to New Duties
Despite firm doctrinal barriers, tort law has shown, over the centuries, a remarkable adaptability in expanding to meet societal needs.143 The tort of negligence has evolved from being applicable to confined relationships and limited circumstances144 into a complex normative system applicable to wide-reaching aspects of modern life.145 Negligence law has evolved to meet changing societal norms in many areas, such as psychiatric harm,146 evidential issues regarding asbestos claims,147 and pure economic loss.148 Tort doctrine pertaining to mental harm has been significantly stretched, from a rigid position of scepticism149 to a more progressive approach in contemporary society.150 Tort law has been adapted to address social injustices pertaining to Indigenous rights151 and protecting human rights.152 Tort law can serve an important deterrent function—153 to prevent harm before it occurs—which is particularly relevant in the context of climate change.
Following the Sharma Appeal Decision, it is clear that Australian courts do not currently recognize a duty of care of the government to avoid contributing to the causes of climate change. This argument, however, was assessed on the basis of a very specific relationship between the plaintiffs and the defendant based on particular statutory duties of a minister. Given that the subject matter of this article is the application of a novel duty of care to private corporations rather than the government, the central reasoning espoused in the Sharma Appeal Decision may not be directly transferrable to a corporate defendant. In addition, the argument pertaining to ‘the unsuitability of the issue for determination by the Judicial branch’154 does not readily extend to determination of private law issues between a corporation and individuals. This section therefore addresses the salient features that may be relevant to climate change litigation that assesses whether these features could support the imposition of a duty of care on corporations.
A further key distinguishing feature of a future claim may be the presence of harm. Where plaintiffs allege that they have sustained actual harm from a breach of a duty of care by a corporate defendant, they will be in a better position to argue the existence of a duty of care, in line with the reasoning in the Sharma Appeal Decision.155
4.2.1 Reasonable Foreseeability
Reasonable foreseeability is a necessary condition for imposing a novel of duty of care. This ‘salient feature’ requires consideration of ‘whether it is reasonably foreseeable as a possibility that careless conduct of any kind on the part of the defendant may result in damage of some kind to the person or property of the plaintiff’.156 At the stage of identifying the duty of care, reasonable foreseeability involves a ‘generalised enquiry’,157 which occurs at a ‘higher level of abstraction’158 than at the stage of assessing whether the duty has been breached. It requires the plaintiff to show that he or she belongs to a class of person who is foreseeably at risk of injury if the defendant fails to take reasonable care, and it does not require the defendant to envisage a precise sequence of events leading to harm.159
a reasonable person in the Minister’s position would foresee that, by reason of the effect of increased co2 in the Earth’s atmosphere and the consequential increase in global average surface temperature, each of the Children is exposed, through the occurrence of heatwaves or bushfires, to the risk of death or personal injury.160
On appeal, two of the judges were satisfied that even a small risk of rise in emissions could lead to harm, and therefore that there was a real and not fanciful possibility that the contribution in question would cause or materially contribute to the harm.161 Thus, this salient feature was found proven by the majority. If a plaintiff were to litigate a claim for a novel duty of care, at least insofar as the element of reasonable foreseeability is concerned, Sharma could be relied on for support.162 It should be noted however, that both Chief Justice Allsop and Justice Beach referred to the considerable quantity (100 Mt co2) of potential future emissions from the combustion of coal extracted from the mine in question.163 A decision on the reasonable foreseeability of harm to a future plaintiff will therefore be impacted by the nature and magnitude of the promise made by a corporate defendant.
To establish reasonable foreseeability, the plaintiff would need to show that a reasonable person in the position of a corporate defendant foresaw that careless conduct on its part could lead to harm to a class of persons to which the plaintiff belongs. No Australian precedent directly addresses the issue of whether corporate actors can reasonably foresee that their failure to mitigate the impact that their business activities have on climate change can lead to harm to a class of persons. In the absence of such direct case law, the application of tort law principles in non-climate change contexts guides how reasonable foreseeability could be established for corporations. In Sydney Water v. Turano,164 the High Court confirmed that ‘reasonable foreseeability of the class of injury is an essential condition of the existence of a legal obligation to take care for the benefit of another’.165 Further, ‘it was not necessary that the precise sequence of events leading to [the plaintiff’s] injury be foreseen’.166 However, it was necessary to show that it was foreseeable by the defendant that its conduct involved a risk of injury to the class of persons to which the plaintiff belonged. Consequently, the question that courts adjudicating a climate tort against a company would have to answer would be whether, at the time of making a mitigation pledge, it was foreseeable by the company that not keeping the promise would involve a risk of injury to a certain kind of plaintiff. Case law illustrates the readiness of courts to impose liability on corporate actors for a wide range of circumstances and factors. For example, the High Court of Australia, in Kuhl v. Zurich Financial Services Australia Ltd, found a reasonable foreseeability in claims by an injured plaintiff (Kuhl) against a corporate defendant in the manufacture of a product used on a work site.167
A plaintiff could also rely on cases such as Chapman v. Hearse168 and Overseas Tankship (UK) Ltd v. Miller Steamship Co Pty Ltd (The Wagon Mound No. 2).169 These provide a precedent for the principle that reasonable foreseeability does not require that each specific step in the chain be foreseeable, but rather that ‘it is sufficient if it appears that injury to a class of persons of which [the plaintiff] was one might reasonably have been foreseen as a consequence’.170
4.2.2 Control
The degree and nature of a defendant’s control over a situation is another salient feature that has featured prominently in Australia in High Court decisions pertaining to duty of care. For example, in Perre v. Apand it was held that ‘where a person is in a position to control the exercise or enjoyment by another of a legal right, that position of control and, by corollary, the other’s dependence on the person with control are … special factors [that] … give rise to a special relationship’.171 In Crimmins v. Stevedoring Industry Finance Committee,172 a case in which dock workers were exposed to asbestos, factors such as the stevedoring authority’s capacity to decide where and how often workers were assigned to particular workplaces in which asbestos was known to be present, along with the provision of the safety equipment that workers were required to wear, demonstrated the authorities’ control of the risk. In Graham Barclay Oysters Pty Ltd v. Ryan,173 the High Court confirmed that ‘control is a well-established basis for the existence of a duty of care in a public authority or a private citizen’ in finding that the state-government authority and local council did not have sufficient control over oyster harvesting that led to contamination.174 The High Court stressed that in cases involving public authorities, control will be a significant factor for consideration.175 Hence, control was also a central feature in Sharma.
In the Sharma Appeal Decision, all three judges held that, while the minister had control over the risk of harm, her control over the mine’s approval did not equate to control over the extent of harm.176 The question of control is one about who holds the power to make decisions regarding the potential harm. This is evidenced in Perre v. Apand, in which the defendant was found to have control of the harm caused by growing infected potato crops because it was in control of the choices being made regarding the treatment of potato seed, including how and where it was developed.177 A corporation exercises similar control over climate change harms through its control of decision-making, such as to continue investment in emission-intensive industries, instead of diverting capital to renewable-energy technologies.
In making voluntary commitments, companies are publicly asserting that the fulfilment of efforts to minimize climate change harms is within their control. For plaintiffs seeking to impose a duty, they will need to show not only that the company has control over the risk of harm, but that it also has control over the actual harm. This is problematic in light of the Sharma Appeal Decision, where it was this control which was considered ‘extremely faint at best’ in light of the ‘nature of the harm as a global climate catastrophe’.178 Similar considerations would apply to an action against a corporation. To overcome the precedent set by Sharma, a High Court decision revisiting the appeal court’s interpretation of control over harm would be required.
4.2.3 Vulnerability
‘Vulnerability’, in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, ‘vulnerability’ is to be understood as a reference to the plaintiff’s inability to protect itself from the consequences of a defendant’s want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant.
In assessing whether a publican owed a duty of care to an intoxicated patron, the High Court in cal No. 14 Pty Ltd v. Motor Accidents Insurance Board181 considered the vulnerability of the patron. It found that the deceased was not vulnerable, as he was an adult and experienced drinker—factors that negated the existence of a duty of care.
In the Sharma Appeal Decision, the trial judge’s finding that Australian children were a vulnerable class was overturned. The Chief Justice held that ‘The Children are in the same position as everyone in the world who is or will be alive at the future times at which the harm is posited.’182 Justice Beach stressed the importance of remaining clear that the focus is not on ‘generalised vulnerability’ to climate change, but rather on vulnerability to particular harm, which in this case was personal injury connected to breach of duty ‘where members of the claimant class could not reasonably be expected to adequately safeguard themselves from such harm’.183
It follows that a plaintiff would have to show that he or she is vulnerable to the risk of harm resulting in loss or damage flowing from the corporation’s breach of duty, rather than a generalized vulnerability to climate change.184 Whilst there is scientific evidence that the Australian public in general is vulnerable to climate change,185 particular communities are forecast to be considerably more impacted than others by adverse climatic effects, including fire and floods.186 Thus, a plaintiff community could argue that it is particularly vulnerable (over and above the general public) due to expected exceptionally severe impacts from climate change, and that emissions contributing to or increasing the risk of such harm are factors that they are relatively powerless over. However, it is worth nothing that, unlike a foetus in utero,187 which is completely vulnerable, or unlike a situation wherein the plaintiff relies on the defendant’s professional service,188 customers (or potential customers) of corporations cannot be said to be so highly vulnerable. As the High Court held in Perre v. Apand, ‘in determining whether the plaintiff was vulnerable, an important consideration will be whether the plaintiff could easily have protected itself against the risk of loss by protective action’.189 The High Court held that the appellants in that case were particularly vulnerable to the respondents’ conduct in introducing an experimental potato crop infected with bacterial wilt on neighbouring land, which ultimately affected the appellants’ ability to export potatoes.190
Nevertheless, a plaintiff’s socioeconomic status may make the plaintiff vulnerable to a corporation’s greenhouse gas emissions. For example, the plaintiff may face technical limitations (as in the case of a low-lying island which cannot be adapted to sea-level rise) or increased costs (in the case where, even if adaptation is possible, economic injury will be incurred in the process of adaptation).
4.2.4 Indeterminacy
The potential indeterminacy of liability is a prominent salient feature which needs to be considered in deciding whether to find a duty of care.191 In Perre v. Apand, the High Court acknowledged that the question of indeterminacy was a policy consideration, to ensure that the imposition of liability does not lead to indeterminate liability, whether that be to the number, time, or class of persons.192 To narrow this down for the context of establishing a duty of care, ‘Concern about indeterminacy most frequently arises where the defendant could not determine how many claims might be brought against it or what the general nature of them might be.’193 In the case of climate change, the potential indeterminacy of the class of persons could be problematic.
In the Sharma Appeal Decision, Justice Beach noted that ‘there is no meaningful limit on how many of the claimant class will suffer harm and how many times they will be so harmed, when that damage will occur over the next century or so, and the extent of that damage’.194 Similarly, Chief Justice Allsop stated that the ‘potential liability of the Minister is indeterminate in number and nature’.195
One potential avenue of overcoming the indeterminacy hurdle is for plaintiffs to articulate the duty so as to limit it to vulnerable groups that are particularly impacted by climate change. This would limit the sphere of liability to claims by individuals or groups in communities particularly affected by climate change. However, this group of people would also have to have a sufficiently defined relationship with the defendant for a duty of care to be found.
At this point in time in Australia, the barriers to recognizing a novel duty of care for corporations under the common law tort of negligence are high, even taking into account the differences between corporate and government defendants.
5 Would the Recognition of a Duty of Care Open Pandora’s Box?
While the previous section considered factors in determining a novel duty of care, a separate important question that remains is whether doing so is in the best interests of climate change mitigation policy. In the Sharma Appeal Decision, the coherence or ‘fit’ of a novel duty with the existing system of law was a central consideration. It is therefore necessary to consider whether key policy objectives might be undermined by the expansion of tort law into climate-related harm.
Recognizing that corporations may be liable for climate-related harm under a novel duty in tort law could have a range of regulatory consequences. As a matter of climate policy, while a novel duty can benefit climate-mitigation activities by extending the obligations imposed on corporations, it has the capacity to undermine action to mitigate climate change. Corporations, if threatened with the possibility of tortious civil liability for failing to achieve voluntary climate change goals, could simply refrain from adopting voluntary goals or from acting more ambitiously than their discharge of statutory requirements. Additionally, in a world where ‘green’ is a selling point, corporations might be encouraged to engage in greenwashing, to the detriment of consumers—that is, to adopt climate targets that appease shareholders and appeal to consumers, but which lack the substance or specific timelines to create any binding obligation on the relevant corporation under the Corporations Act or under a novel duty in tort. Giving corporations reason to limit their action to mitigate climate change would clearly be a step backward for climate change policy in Australia.
Civil litigation in tort law, moreover, has clear disadvantages, including complexity, expense, length of litigation, unpredictability, and inconsistency in outcomes.196
In relation to claims against corporations, ‘the world of environmental litigation is rich in both pyrrhic victories and sublime failures’.197 Past attempts at climate change litigation have unearthed challenges pertaining to standing, proof of harm, and causation.198 Yet, even where litigation is unsuccessful, it can effect reputational damage for the corporation involved, attracting unwanted public scrutiny over climate-mitigation failures and subjecting undesirable corporate practices to scrutiny.199 Litigation is not only costly for plaintiffs—it may also be particularly expensive for corporations.200 This in itself is a potential deterrent for corporations, and could further encourage mitigation practices.
6 Conclusion
In this article we considered whether legal action should be available for aggrieved individuals and communities to seek compensation from corporations which have voluntarily made promises to mitigate climate-related harm. A rich body of case law is developing in Australia around shareholder action and directors’ duties to hold companies responsible to their shareholders for their climate-related commitments. Tort law holds the promise to enable other, non-shareholder groups to likewise seek compensation for climate-related harm through the court system.201
Tort law has evolved into a sophisticated and adaptable body of rules expanding into fields of harm. As such, it is uncontroversial to seek to extend well-established principles to new and emerging societal issues, such as climate-related harm; moreover, a tort-based argument has successfully been made in the Dutch Shell case.202 However, despite an increase in climate change litigation relying on tort law, few claims to date have been successful, with scholars questioning whether ‘insurmountable doctrinal barriers will defeat potential plaintiffs’.203 In common law jurisdictions, arguments for compensation for climate-related harm have been unsuccessful, and their potential success now appears remote in Australia in light of the Sharma Appeal Decision.
Nevertheless further actions are under consideration. One which seeks to argue a governmental duty of care toward climate-impacted First Nations in Australia is still under consideration in the Pabai case.204 The Smith litigation,205 in New Zealand, is under appeal. In the Sharma Appeal Decision, Justice Beach acknowledged the potential for future extension of tort principles to novel claims. He noted that ‘the primary judge planted the seed of a cause of action in finding the posited duty’. However, the judge went on to qualify that statement: ‘the seed may not fulfil its Aristotelian potential of a fully formed tort for many decades, if at all’.206 He further noted that, ‘it is for the High Court not us to engineer new seed varieties for sustainable duties of care’.207 The door to future claims in tort is therefore left slightly ajar.208
For instance, see Saul Holt and Chris McGrath, ‘Climate Change: Is the Common Law up to the Task?’, 24 Auckland University Law Review 10 (2018); Gabrielle Holly, ‘Transnational Tort and Access to Remedy under the UN Guiding Principles on Business and Human Rights: Kamasaee v. Commonwealth’, 19(1) Melbourne Journal of International Law 52 (2018); Geetanjali Ganguly, Joana Setzer, and Veerle Heyvaert, ‘If at First You Don’t Succeed: Suing Corporations for Climate Change’, 38(4) Oxford Journal of Legal Studies 841 (2018); Douglas A. Kysar, ‘What Climate Change Can Do about Tort Law’, 41(1) Environmental Law 1 (2011); Brian Preston, ‘Climate Change Litigation: A Conspectus’, Conference Paper, Law Asia Conference, 11–14 November 2010, 3. See also: Smith v. Fonterra Co-Operative Group Ltd [2021] nzca 522, hereinafter Smith; R (Plan B Earth & Others) v. The Prime Minister & Others [2021] ewhc 3469 (Admin); Urgenda Foundation v. State of the Netherlands, Hoge Raad der Nederlanden [Supreme Court of the Netherlands], ecli:nl:hr:2019:2006, 20 December 2019, transl. Lisanne Adam, hereinafter Urgenda; Sharma by her litigation representative Sister Marie Brigid Arthur v. Minister for the Environment [2021] fca 560, hereinafter Sharma Trial Decision; and Minister for the Environment v. Sharma [2022] fcafc 35, hereinafter Sharma Appeal Decision.
Sharma Appeal Decision, supra note 1, [208]-[211] (per Allsop cj); also Smith, supra note 1.
Wendy Bonython, ‘Tort Law and Climate Change’, 40(3) University of Queensland Law Journal 421 (2021), 423. See also Nicola Durrant, ‘Tortious Liability for Greenhouse Gas Emissions? Climate Change, Causation and Public Policy Considerations’, 7(2) Queensland University of Technology Law and Justice Journal 403 (2007).
Joana Setzer and Catherine Higham, Global Trends in Climate Change Litigation: 2022 Snapshot, Report, Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy, 2022, 2.
Ibid.
Sharma Trial Decision and Sharma Appeal Decision, both supra note 1; Pabai v. Commonwealth of Australia (Federal Court of Australia, VID622/2021), hereinafter Pabai.
For instance, in Abrahams v. Commonwealth Bank of Australia VID622/2021, hereinafter Abrahams v. cba, shareholders in the cba sought to access documents under the Corporations Act 2001 (Cth) to verify whether the bank had carried out environmental, social, and economic actions in compliance with the Paris Agreement when becoming involved with several projects.
National Greenhouse and Energy Reporting Act 2007 (Cth), Pt 3H, inserted by the Carbon Farming Initiative Amendment Act 2014 (Cth), Sch. 2.
For example, see the climate commitments by fossil-fuel companies bhp <www.bhp.com/sustainability/climate-change> and agl <www.agl.com.au/-/media/aglmedia/documents/about-agl/asx-and-media-releases/2020/climate-statement-and-commitments-300620.pdf>. As a further example, growth of the Renewable Energy Certificate market under the legislated Renewable Energy Target Scheme is now predominantly in voluntary commitments: Clean Energy Regulator, Quarterly Carbon Market Updates (September 2021) <www.cleanenergyregulator.gov.au/Infohub/Markets/Pages/qcmr/september-quarter-2021/Voluntary-demand-for-Australian-units-and-certificates.aspx>.
Setzer and Higham, supra note 4, 1.
Joana Setzer and Rebecca Byrnes, Global Trends in Climate Change Litigation: 2019 Snapshot, Report, Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy, July 2019, 4.
Bonython, supra note 3; Philipp Semmelmayer, ‘Climate Change and the German Law of Torts’, 22(8) German Law Journal 1569 (2021); Douglas A. Kysar, ‘The Public Life of Private Law: Tort Law as a Risk Regulation Mechanism’, 9(1) European Journal of Risk Regulation 48 (2018), 48.
Ganguly et al., supra note 1.
Ibid. For notable US tort law cases, see Comer v. Murphy Oil, 585 F 3d 855 (5th Cir., 2009); Kivalina v. ExxonMobil, 663 F.Supp.2d 863 (nd Cal, 30 September 2009); Massachusetts v. epa, 549 US 497 (2007); Connecticut v. American Electric Power, 406 F Supp 2d 265 (sd NY, 2005); and State of California v. General Motors, 2007 wl 2726871 (nd Cal, 2007).
Ganguly et al., supra note 1, 844.
Ibid.
Setzer and Byrnes, supra note 11, 8–9. The authors define attribution science as ‘the study of the relationship between climate change and weather events and impacts’.
Lliuya v. rwe ag 2015, Case No. 2 O 285/15, Essen Regional Court, hereinafter (Lliuya v. rwe).
Ganguly et al., supra note 1, 855. For case development updates see: <http://climatecasechart.com/non-us-case/lliuya-v-rwe-ag/>.
Rupert Stuart-Smith, et al., ‘Filling the Evidentiary Gap in Climate Litigation’, 11 Nature Climate Change 651 (2021), 653.
Ganguly et al., supra note 1, 868.
Urgenda, supra note 1.
Equivalent to the High Court of Australia.
Whilst the first-instance decision of The Hague District Court (Urgenda Foundation v. State of the Netherlands, Rechtbank Den Haag, ECLI:NL:RBDHA:2015:7196, 24 June 2015) based this duty of care on Art. 6:162 of the Dutch Civil Code, the appeal to The Hague Court of Appeal (Gerechtshof Den Haag, ECLI:NL:GHDHA:2018:2610, 9 October 2018) and to the Supreme Court of the Netherlands (Urgenda, supra note 1) relied on an interpretation of human rights law, rather than substantive tort law principles. In the latter proceedings, the plaintiffs successfully argued on human rights grounds—under the Convention for the Protection of Human Rights and Fundamental Freedoms, opened for signature 4 November 1950, 213 unts 221 (entered into force 3 September 1953), Art. 2 (the right to life) and Art. 8 (respect for private and family life)—that the government of the Netherlands should adopt stricter emission-reduction targets.
Setzer and Higham, supra note 4, 2.
Milieudefensie et al. v. Royal Dutch Shell plc., The Hague District Court, ecli:nl:rbdha:2021:5339, 25 May 2021, hereinafter Milieudefensie v. Shell.
Shell plc, ‘Frequently Asked Questions (faqs) on Dutch District Court Legal Case’, Press Release, updated 22 March 2022, <www.shell.com/media/news-and-media-releases/2021/shell-confirms-decision-to-appeal-court-ruling-in-netherlands-climate-case/_jcr_content/par/grid_copy_copy_copy_/p0/textimage.stream/1647925854400/460167304a697f411be1b9f80c6e05be0ac057fb/dutch-district-legal-case-faq.pdf>.
Ibid.
Smith, supra note 1.
Ibid.
Setzer and Byrnes, supra note 11, 7. Note that the court system in Australia is divided into state courts, which handle matters within state jurisdiction (property, crime, torts), a federal court which handles federal issues along with matters such as family law, corporations law, and immigration, and the High Court of Australia, which is the country’s highest court, with both appellate and original jurisdiction.
Jacqueline Peel, Hari Osofsky, and Anita Foerster, ‘Shaping the “Next Generation” of Climate Change Litigation in Australia’, 41(2) Melbourne University Law Review 793 (2017), 825. For notable examples of cases relating to new coal mines, see Coast and Country Association of Queensland Inc v. Smith [2016] qca 242; Gloucester Resources Ltd v. Minister for Planning [2019] nswlec 7; Australian Conservation Foundation Incorporated v. Minister for the Environment and Energy (No. 2) [2017] fcafc 216; New Acland Coal Pty Ltd v. Ashman (No. 4) [2017] qlc 24; and Wildlife Preservation Society of Queensland Proserpine/Whitsunday Branch v. Minister for the Environment and Heritage (2006) 232 alr 510. For a comprehensive list, see ‘Australian Climate Change Litigation, Project Approval, Mitigation’, University of Melbourne, <https://apps.law.unimelb.edu.au/climate-change/case.php?litigation=Project%20Approval%20-%20Mitigation&id=5>.
For a helpful overview see Prafula Pearce, ‘Duty to Address Climate Change Litigation Risks for Australian Energy Companies: Policy and Governance Issues’, 14 Energies 7838 (2021), Appendix B.
[2019] fca 14, hereinafter McVeigh v. rest.
Abrahams v. cba, supra note 7.
Pabai, supra note 6.
Pabai, supra note 6, Applicants’ Concise Statement (31 March 2022), at [10]. Torres Strait Islanders have a distinctive culture, known as Ailan Kastom, which includes a unique spiritual and physical connection with the Torres Strait Islands and surrounding waters.
Ibid. The case was filed in 2021 and is ongoing.
Sharma Appeal Decision, supra note 1, at [247] (per Allsop cj).
Ibid., at [7] (per Allsop cj) for an overview of arguments.
Ibid., at [358] (per Allsop cj).
Zoe Bush, ‘Is Climate Change Justiciable? Politics and Policy in Minister for the Environment v Sharma’, on auspublaw (29 June 2022), <www.auspublaw.org/blog/2022/06/is-climate-change-justiciable-politics-and-policy-in-minister-for-the-environment-v-sharma>.
Peel et al., supra note 32; and Anita Foerster, ‘Climate Justice and Corporations’, 30(2) King’s Law Journal 305 (2019).
Ibid., at 307.
Pearce, supra note 33, at Appendix A.
Noel Hutley and Sebastian Hartford-Davis, Climate Change and Directors’ Duties, Memorandum of Opinion, Centre for Policy Development and Future Business Council, 23 April 2021, at [4].
Foerster, supra note 43, 307.
Corporations Act 2001 (Cth), ss 180–1 (Corporations Act).
Ibid., s. 299.
Ibid., s. 249N.
Ibid., s. 9, defines director and officer.
Ibid., s. 180(1).
Ibid., s. 181.
Under Superannuation Industry (Supervision) Act 1993 (Cth), ss 52A(2)(b) and 52(2)(c).
Peel et al., supra note 32, 825–7.
Foerster, supra note 43, 315. For example, see McVeigh v. rest, supra note 34.
Hutley and Hartford-Davis, supra note 46, 5.
Noel Hutley and James Mack, Market Forces: Superannuation Fund Trustee Duties and Climate Change Risk, Memorandum of Opinion, Centre for Policy Development and Future Business Council, 15 June 2017, 2.
Hutley and Hartford-Davis, supra note 46, 16–17. See also Noel Hutley and Sebastian Hartford-Davis, Climate Change and Directors’ Duties, Supplementary Memorandum of Opinion, Centre for Policy Development and Future Business Council, 26 March 2019, 6–7.
United Nations Conference on Environment and Development, Rio Declaration on Environment and Development 1992, Principle 3.
Arjya Majumdar, ‘The Fiduciary Responsibility of Directors to Preserve Intergenerational Equity’, 159(1) Journal of Business Ethics 149 (2017), 156.
asx, Listing Rules (1 December 2019).
asx, Corporate Governance Principles and Recommendations, 4th ed. (February 2019).
Corporations Act, supra note 48, s. 292(1).
Ibid., s. 299(1).
Ibid., s. 1017C.
Australian Securities and Investments Commission, Climate Risk Disclosure by Australia’s Listed Companies, Report 593, September 2018, 3.
Ibid., 4.
Michael Bloomberg, Recommendations of the Task Force on Climate-related Financial Disclosures, Report, June 2017, <www.fsb- tcfd.org/publications/final-recommendations-report/>, hereinafter tcdf.
Ibid., 6. Further categorized to include policy and legal risks, technology risk, market risk, and reputation risk.
Ibid. Further categorized as either acute (related to an extreme weather event) or chronic (related to long-term changes in climate).
Corporations Act, supra note 48, ss 292(1), 299A(1), and 1017C; McVeigh v. rest, supra note 34; and Abrahams v. cba, supra note 7.
McVeigh v. rest, supra note 34.
Transactions connected to natural-gas pipelines, liquid-natural-gas vessels, coal-seam-gas projects, crude-oil shipments, and other fossil-fuel projects.
Equity Generation Lawyers, <https://equitygenerationlawyers.com/abrahams-v-commonwealth-bank-of-australia-2021/>.
Ibid.
Federal Court of Australia, Orders, Guy Abrahams & Kim Abrahams as trustee for the Guy & Kim Abrahams Family Trust v. Commonwealth Bank of Australia nsd 864/2021 (Justice Cheeseman, 4 November 2021).
Corporations Act, supra note 48, s. 249N.
Susan Shearing, ‘Raising the Boardroom Temperature? Climate Change and Shareholder Activism in Australia, 29(6) Environmental and Planning Law Journal 479 (2012).
Australasian Centre for Corporate Responsibility v. Commonwealth Bank of Australia (2016) 337 alr 558.
Michael Kerr, Richard Janda, and Chip Pitts, Corporate Social Responsibility: A Legal Analysis (Markham, Ontario: LexisNexis, 2009), 60.
National Greenhouse and Energy Reporting Act 2009 (Cth).
Renewable Energy Electricity Act 2000 (Cth).
National Greenhouse and Energy Reporting Act 2007 (Cth), Pt 3H, inserted by the Carbon Farming Initiative Amendment Act 2014 (Cth), Sch. 2.
Australian Council of Superannuation Investors, Promises, Pathways & Performance: Climate Change Disclosure in the ASX2000, Report, August 2021.
Where a company has adopted more than one type of voluntary commitment, the company will be counted separately under each category.
Australian Council of Superannuation Investors, supra note 85, 10–12, Appendix.
Ibid., 14.
Ibid., 14, Table 2.
Ibid., 14, Table 3.
Ibid., 16–26.
Ibid., 27, with another 25 companies identifying climate-related risks as risks that directors would need to be cognisant of.
Coles Group, ‘Together to Zero Emissions’, March 2021, <www.coles.com.au/about-coles/sustainability/environment/together-to-zero-emissions>.
Woolworths, Sustainability Plan 2025: Working Together to Create a Better Tomorrow (2020).
Toyota Australia, Toyota Sustainability Report 2020 (2020).
Commonwealth Bank of Australia, Annual Report 2021 (2021).
Coles: reduce scope 1 and 2 emissions by 75% from 2020 levels by 2030; Woolworths: reduce scope 1 and 2 emissions by 63% and scope 3 emissions by 19% from 2015 levels by 2030; Toyota Australia: reduce emissions by 25% over the entire vehicle lifecycle from 2013 levels by 2025 (Challenge 2) and reduce emissions from plants (globally) by 35% from 2013 levels by 2030; Commonwealth Bank of Australia: general reductions of scope 1 and 2 emissions (no specific target).
Woolworths, supra note 94, 31.
Toyota Australia, supra note 95, 23.
Commonwealth Bank of Australia, supra note 96.
bhp, Climate Change Targets and Goals, <www.bhp.com/sustainability/climate-change>.
Coles Group, supra note 93.
Toyota Australia, supra note 95, at 23.
Commonwealth Bank of Australia, cba, csiro to boost sector resilience with new climate change insights, Media Release, November 202.
Australasian Centre for Corporate Responsibility v. Santos Ltd, nsd858/2021.
Ganguly et al., supra note 1, citing Beate Sjåfjell and Benjamin J. Richardson, ‘The Future of Company Law and Sustainability’, in Beate Sjåfjell and Benjamin J. Richardson (eds), Company Law and Sustainability: Legal Barriers and Opportunities (Cambridge University Press, 2016), 312.
Ibid.
Ganguly et al., supra note 1, citing Jim Apollo Mathiopoulos, ‘The Purpose of For-Profit Corporations in Light of Modern Perceptions and Wider Corporate Responsibilities (Part 1)’, 38 Company Law 9 (2017), 278.
Specifically, the ministerial powers under s. 130 and s. 133 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (epbc Act).
Sharma Trial Decision, supra note 1, at [1].
Ibid., at [9].
Ibid., at [11].
Ibid., at [95].
Ibid., at [96]. See the discussion of the salient features approach in more detail below.
(2001) 207 clr 562.
Caltex Refineries (Qld) Pty Limited v. Stavar [2009] nswca 258, at [102] (Allsop P), hereinafter (Caltex Refineries).
Ibid., at [107] (Allsop P).
Carey v. Freehills [2013] fca 954, at [316] (Kenny J).
Hoffmann v. Boland [2013] nswca 158, at [31] (Basten ja).
Sharma Trial Decision, supra note 1, at [105].
Ibid., at [271].
Ibid., at [294–6].
Ibid., at [316].
Ibid., at [114].
Ibid., at [117].
Ibid., at [247].
Ibid., at [288].
Ibid., at [295].
Ibid., at [311].
Ibid., at [495].
Sharma Appeal Decision, supra note 1, at [211] (Allsop cj), emphasis in original.
Ibid., at [17] (Allsop cj).
Ibid., at [207] (Allsop cj).
Ibid., at [211] (Allsop cj).
Ibid., at [785] (Wheelahan J).
Ibid., at [8–17] (Allsop cj).
Ibid., at [266] (Allsop cj).
Ibid., at [868] (Wheelahan J).
Ibid., at [7] (Allsop cj).
Ibid., at [702–47] (Beach J).
Ibid., at [748] (Beach J).
Ibid., at [869–86] (Wheelahan J). See specifically at [869]: ‘I am not persuaded that a decision by the Minister to approve the Extension Project would give rise to a foreseeable risk of injury to the respondents or any of those whom they represent.’
Margaret Brazier and John Murphy, Street on Torts, 10th ed. (Butterworths, 1999), 2–4.
Heaven v. Pender (1883) 11 qbd 503 (ca). For a historical overview see Michael Lobban, ‘Negligence’, in The Oxford History of the Laws of England: Volume xii: 1820–1914 Private Law (Oxford, 2010), 903–57.
Harold Luntz et al., Luntz & Hambly’s Torts: Cases, Legislation and Commentary, 9th ed. (LexisNexis, 2021), chapters 2–8.
Tame v. nsw [2002] hca 35; Annetts v. Australian Stations P/L (2002) 211 clr 317.
Amaca Pty Ltd v. Booth (2011) 246 clr 36.
Hedley Byrne & Co Ltd v. Heller & Partners Ltd [1964] ac 465; Shaddock & Associates Pty Ltd v. Parramatta City Council (No 1) (1981) 150 clr 225.
Victorian Railway Commissioners v. Coultas (1888) 13 App Cas 222; Chester v. Waverley Corporation (1939) 62 clr 1; Jaensch v. Coffey (1985) 155 clr 549.
See, for instance, Kozarov v. Victoria [2022] hca 12 (13 April 2022), where the High Court held that an employer’s duty of care included the need to take reasonable care to avoid psychiatric injury. For a progressive approach to mental harm claims, see Saadati v. Moorhead [2017] 1 scr 543.
Trevorrow v. South Australia (No. 5) (2007) 98 sasr 136.
Jane Wright, Tort Law and Human Rights, 2nd ed. (Bloomsbury, 2017).
The deterrence function of tort law was acknowledged in Hollis v. Vabu Pty Ltd [2001] 207 clr 21, at [92] (per Gleeson cj, Gaudron, Gummow, Kirby, and Hayne jj): ‘The “deterrence of future harm” justification for imposing vicarious liability is therefore applicable to Vabu and its couriers, in the sense that it encourages accident reduction and provides incentive for the discipline of workers guilty of wrongdoing.’
Sharma Appeal Decision, supra note 1, at [172] (Allsop cj).
Ibid., at [359] (Beach J), and at [767] (Wheelahan J).
Ibid., at [417].
Wyong Shire Council v. Shirt [1980] hca 12; 146 clr 40, at 47 (Mason J).
Vairy v. Wyong Shire Council 223 clr, at 446–7 (Gummow J).
Chapman v. Hearse (1961) 105 clr 112, at [6] (Dixon cj, Kitto, Taylor, and Windeyer jj): ‘But one thing is certain and that is that in order to establish the prior existence of a duty of care with respect to a plaintiff subsequently injured as the result of a sequence of events following a defendant’s carelessness it is not necessary for the plaintiff to show that the precise manner in which his injuries were sustained was reasonably foreseeable; it is sufficient if it appears that injury to a class of persons of which he was one might reasonably have been foreseen as a consequence.’
Sharma Trial Decision, supra note 1, at [247] (Bromberg J).
Sharma Appeal Decision, supra note 1, at [333] (Allsop cj): ‘Thus, there is no reason to deny the duty of care by reference to there being no reasonable foreseeability of harm.’ And at [423] (Beach J): ‘In my view, his Honour was not incorrect to find that reasonable foreseeability had been established.’
The Sharma Trial Decision and Sharma Appeal Decision, both supra note 1.
Sharma Appeal Decision, supra note 1, at [331] (Allsop cj), and at [431] (Beach J).
[2009] hca 42.
Ibid., at [45].
Ibid., at [46].
(2011) 243 clr 361.
(1961) 106 clr 112.
[1967] 1 ac 617 (Privy Council) (Wagon Mound [No. 2]).
Chapman v. Hearse (1961) 106 clr 112, 120–1.
(1999) 198 clr 180, at [38] (Gaudron J) (Perre).
(1999) 200 clr 1.
(2002) 211 clr 540.
Ibid., at [20] (Gleeson cj).
Ibid., at [150]: ‘The factor of control is of fundamental importance in discerning a common law duty of care on the part of a public authority.’
Sharma Appeal Decision, supra note 1, at [334–7] (Allsop cj); at [837–52] (Wheelahan J); at [634–68] (Beach J): ‘In summary, I do not accept that the Minister did not, in a relevant sense, control the risk flowing from her approval.’
Perre, supra note 172, at [407–8].
Sharma Appeal Decision, supra note 1, at [334] (Allsop cj).
Caltex Refineries, supra note 119, at [104] (Allsop P).
(2004) 216 clr 515, 530 (Gleeson cj, Gummow, Hayne, and Heydon jj).
(2009) 239 clr 390.
Sharma Appeal Decision, supra note 1, at [338] (Allsop cj).
Ibid., at [671] (Beach J).
Ibid., at [671–2] (Beach J).
Australian Academy of Science, The risks to Australia of a 3°C warmer world, Report, 2021.
Climate Council, Uninsurable Nation: Australia’s Most Climate-Vulnerable Places, Report, 2021.
Harriton v. Stephens (2006) 226 clr 52, 76 (Kirby J).
Hill v. Van Erp (1997) 188 clr 159 (Brennan cj, Dawson, Toohey, Gaudron, McHugh, and Gummow jj).
Perre, supra note 172, at [120].
Ibid., at [298].
Caltex Refineries, supra note 119, at [104] (Allsop P).
Perre, supra note 172, at [32].
Ibid., at [106].
Sharma Appeal Decision, supra note 1, at [745] (Beach J).
Ibid., at [342] (Allsop cj).
Bonython, supra note 3, 423, citing Timothy Lytton, ‘Using Tort Litigation to Enhance Regulatory Policy Making: Evaluating Climate Change Litigation in Light of Lessons from Gun-Industry and Clergy-Sexual-Abuse Lawsuits’, 86(7) Texas Law Review 1837 (2008).
Ganguly et al., supra note 1, 865.
Ibid., 841.
Ibid., 865.
Ibid.
Bonython, supra note 3, 423.
Milieudefensie v. Shell, supra note 26.
Bonython, supra note 3, 423.
Supra note 6.
Supra note 1.
Sharma Appeal Decision, supra note 1, at [753] (Beach J).
Ibid., at [754] (Beach J).
We would sincerely like to thank Alexander Zahar and Benoit Mayer for their insightful and detailed comments and suggestions.