From Greenwashing to Corporate Inaction: The Evolution of Climate Change Litigation Against Corporations

Ⅰ INTRODUCTION

In 2024, the Hague Court of Appeal reaffirmed that corporations have an obligation to help counter dangerous climate change while observing that the Earth has already warmed by approximately 1.2°C above pre-industrial levels and that global carbon dioxide (CO₂) emissions have continued to increase by approximately 2% annually over recent decades.[1] These findings underscore that climate change is no longer merely an environmental concern but a pressing legal issue that increasingly shapes the responsibilities of corporate actors.

Traditionally, climate litigation against corporations centred on greenwashing challenging misleading environmental claims, deceptive sustainability commitments, and exaggerated net-zero ambitions.[2] While such litigation remains significant, recent judicial developments reveal a discernible shift in both the focus and ambition of climate claims. Courts are increasingly moving beyond scrutinising what corporations say about climate change to evaluating whether their business strategies, investment decisions, and emissions trajectories are consistent with internationally recognised climate objectives. This emerging trend reflects a broader evolution in climate accountability, whereby corporate inaction, rather than merely misleading representations, has become the principal target of litigation. In my view, this shift is both necessary and overdue, as corporate climate responsibility cannot be measured by rhetoric alone but by tangible, science‑based action.

This article argues that climate change litigation has evolved from policing corporate climate-related communications to imposing greater legal scrutiny on corporate conduct and strategic decision-making. It contends that the rise of corporate inaction litigation represents a significant development in climate jurisprudence, expanding the legal responsibilities of corporations and reshaping the standards against which directors’ decisions and corporate climate governance are assessed.

The discussion begins by examining the emergence of greenwashing litigation before analysing the transition to corporate inaction litigation through recent domestic and international case law. It then considers the implications of this shift for corporate governance, directors’ duties, and the likelihood of South African courts adopting the same approach in future climate litigation cases.

Ⅱ GREENWASHING LITIGATION

The Organisation for Economic Co-operation and Development (OECD) acknowledges that there is no comprehensive definition of greenwashing but describes it as the use of false or exaggerated environmental claims by businesses.[3] It further observes that misleading environmental marketing has become increasingly common.[4] In practice, corporations may portray their products or operations as environmentally sustainable despite evidence to the contrary, often exposing consumers to misleading information and creating a false impression of corporate environmental responsibility.[5]

This form of litigation is illustrated by Fossielvrij NL v KLM.[6] Environmental organisations challenged KLM’s “Fly Responsibly” campaign, arguing that it falsely suggested that flying could be environmentally sustainable through carbon offsetting and sustainable aviation fuel initiatives. The District Court of Amsterdam held that several of KLM’s environmental claims were misleading because they presented an overly optimistic picture of aviation’s climate impact and were insufficiently substantiated under Dutch consumer law.[7] Although the Court did not order corrective advertising, it declared 15 of the 19 impugned statements unlawful, reinforcing the principle that corporate sustainability claims must be accurate, specific and verifiable.[8] These rulings are definitely important because they stop companies from making false sustainability claims, but I think they are too limited. They mainly deal with what companies say, not what they actually do. A company can be told to fix its advertising but still carry on with business models that go against climate science. In that way, greenwashing cases can make companies look compliant while avoiding the harder issue of whether their strategies and emissions are really helping to fight climate change. For real accountability, courts need to go beyond policing words and start looking closely at corporate conduct itself.

While greenwashing litigation has played an important role in promoting truthful corporate environmental communication, its focus remains largely on what corporations say rather than what they do. This limitation has contributed to the emergence of corporate inaction litigation, where the emphasis has shifted from misleading environmental claims to whether corporations are taking adequate steps to address their contribution to climate change. It is this development that forms the focus of this article.[9]

Ⅲ THE EMERGENCE OF CORPORATE INACTION LITIGATION

Cormac Cullinan argues that meaningful environmental protection requires a fundamental transformation of existing legal systems, which he considers inadequate to address the growing environmental crisis.[10] Although this view highlights important shortcomings in current legal frameworks, reforming existing laws appears to be a more practical means of strengthening environmental accountability. The emergence of corporate inaction litigation reflects this approach by using existing legal principles to hold corporations accountable, not merely for what they say about climate change, but for what they do in response to it.

A leading example of this development is Milieudefensie et al v Royal Dutch Shell plc.[11] The claim was brought by Milieudefensie (Friends of the Earth Netherlands), together with several environmental organisations and individual claimants, who argued that Shell’s climate strategy and emissions reduction measures were inadequate and inconsistent with its legal responsibilities.[12] Unlike greenwashing litigation, which focuses on misleading environmental representations, the case challenged the adequacy of Shell’s response to the risks posed by climate change.

The same shift is evident in ClientEarth v Shell plc.[13] Unlike Milieudefensie, where the company itself was sued, ClientEarth was a derivative action brought against Shell’s directors for allegedly breaching their statutory duties under sections 172 and 174 of the Companies Act 2006 by failing to adopt a climate strategy capable of managing foreseeable climate-related financial risks.[14] The directors argued that decisions concerning Shell’s climate strategy fell within the board’s commercial judgment and that the Court should not interfere with those decisions absent a breach of duty.[15]

Although Milieudefensie and ClientEarth arose in different jurisdictions and were founded on different legal causes of action, they reflect a common judicial trend. Courts are increasingly concerned not only with whether corporations make truthful environmental claims, but whether their governance, decision-making and climate strategies adequately respond to the realities of climate change. The importance of these decisions therefore lies less in their outcomes than in the legal principles that underpin them. I consider this judicial willingness to scrutinise corporate governance a positive development, as it signals that courts are prepared to move beyond superficial compliance and confront the substance of corporate climate strategies. It is this reasoning that demonstrates the judiciary’s growing recognition of corporate climate responsibility.

Ⅳ JUDICIAL RECOGNITION OF CORPORATE CLIMATE RESPONSIBILITY

The emergence of corporate inaction litigation has required courts to confront a question that had received comparatively little judicial attention: to what extent can corporations, and those responsible for directing their affairs, be held legally accountable for failing to respond adequately to the risks posed by climate change? Rather than focusing exclusively on misleading environmental claims, recent decisions have begun to examine whether existing principles of private law, company law, and corporate governance are capable of imposing positive obligations upon corporate actors. The reasoning adopted in Milieudefensie and ClientEarth provides important insight into the legal foundations of this developing approach.

Human Rights as the normative foundation of corporate climate responsibility

A defining feature of the Court of Appeal’s reasoning in Milieudefensie is its recognition that contemporary corporate climate responsibility is increasingly informed by international human rights principles. Rather than treating climate change solely as an environmental or regulatory concern, the Court situated it within the broader framework of fundamental rights, thereby acknowledging that the adverse effects of climate change extend beyond ecological degradation to threaten legally protected human interests.[16] In doing so, the Court departed from a narrow conception of corporate responsibility based primarily on regulatory compliance and recognised that private law obligations may be interpreted in light of internationally recognised human rights norms.

Central to the Court’s reasoning was the relationship between Articles 2 and 8 of the European Convention on Human Rights (ECHR), which protect the rights to life and to respect for private and family life, and the unwritten standard of care contained in Article 6:162 of the Dutch Civil Code. The Court accepted that the Convention imposes obligations upon states rather than private corporations. Nevertheless, it reasoned that the values underpinning these Convention rights remain relevant in determining the content of the standard of care owed by corporations whose activities contribute significantly to climate change.[17] Rather than imposing direct human rights obligations on Shell, the Court employed human rights as an interpretative framework through which the scope of Shell’s private law duty of care could be determined.

The Court’s reasoning was firmly grounded in contemporary climate science. Referring to the scientific consensus concerning the accelerating impacts of climate change, including rising global temperatures, biodiversity loss and increasingly severe weather events, it accepted that climate change presents a real and foreseeable threat to the effective enjoyment of fundamental human rights.[18] This scientific evidence was not treated merely as background context but as the factual basis upon which the content of the corporate duty of care could be assessed. By linking established climate science with human rights principles, the Court demonstrated that corporations whose activities substantially contribute to greenhouse gas emissions cannot disregard the foreseeable consequences of those activities when formulating their climate strategies.

The significance of this reasoning extends beyond the facts of Milieudefensie. By allowing international human rights principles to shape the interpretation of private law, the Court effectively broadened the legal framework through which corporate climate responsibility may be assessed. Importantly, however, it exercised judicial restraint by refraining from recognising corporations as direct human rights duty-bearers. Instead, the Court preserved the distinction between public international law and private law while simultaneously ensuring that established human rights norms informed the legal standard expected of multinational corporations.[19] This represents an important doctrinal development because it enables courts to scrutinise corporate climate inaction through existing legal principles rather than requiring the creation of entirely new causes of action.

Ultimately, the Court’s approach illustrates the broader evolution examined in this article. Whereas earlier climate litigation frequently centred on the truthfulness of corporate environmental representations, Milieudefensie demonstrates that judicial attention is increasingly directed towards whether corporate conduct itself satisfies evolving legal standards informed by human rights, climate science and private law. In this respect, the decision provides an important jurisprudential foundation for the emergence of corporate inaction litigation.

The Court’s approach is not without controversy. Supporters argue that using human rights principles to inform the duty of care is a necessary development, given that traditional environmental regulation has often failed to hold corporations accountable for their contribution to climate change. Critics, however, contend that this approach stretches private law beyond its traditional limits by allowing human rights norms, which primarily bind states, to shape corporate obligations. Nevertheless, the Court avoided imposing direct human rights duties on Shell. Instead, it relied on human rights as an interpretative guide in defining an existing private law duty of care, as I have already stressed above. In doing so, the Court struck a careful balance between respecting established legal principles and ensuring that the law remains responsive to the realities of climate change. I support this interpretative approach, because situating corporate climate responsibility within human rights underscores the real human costs of inaction, even if it stretches traditional private law boundaries.

The duty of care and corporate governance as the legal basis for corporate climate responsibility

The Court’s recognition of a corporate duty of care marks one of the most significant developments in Milieudefensie. Rather than focusing on the accuracy of Shell’s climate-related statements, the Court considered whether the company’s conduct met the standard of care expected of a multinational corporation whose activities contribute to climate change.[20]

In determining the content of this duty under Article 6:162 of the Dutch Civil Code, the Court considered the seriousness of climate change, Shell’s contribution to global emissions, international climate commitments, and human rights principles. It concluded that Shell has a legal responsibility to contribute to preventing dangerous climate change because of its ability to influence emissions through its business operations.[21]

Importantly, the Court’s enquiry extended beyond the existence of the duty itself to the manner in which Shell governed climate risk. It examined the company’s Energy Transition Strategy, emissions reduction targets and broader business policies to determine whether Shell’s corporate governance reflected a genuine commitment to addressing climate change.[22] This demonstrates that climate litigation is increasingly concerned with the adequacy of corporate decision-making and governance rather than merely the truthfulness of corporate environmental claims.

Although the Court set aside the District Court’s order requiring Shell to reduce its emissions by 45% by 2030, it did not reject the existence of the duty of care. Instead, it found that the specific emissions target could not be imposed as a legal standard on the facts before it.[23] The significance of the judgment therefore lies in recognising that courts may assess not only what corporations say about climate change, but whether their governance structures, strategic decisions and overall conduct demonstrate an adequate response to climate-related risks. This reasoning reinforces the broader shift from greenwashing litigation towards corporate inaction litigation.

The Potential Recognition of Corporate Climate Responsibility in South African Law

Although South African courts have not yet been required to determine whether corporations owe climate-related duties comparable to those recognised in Milieudefensie, South African law provides a strong foundation for the development of such obligations. Section 39(1)(b) of the Constitution requires courts to consider international law when interpreting the Bill of Rights, while section 39(1)(c) permits them to consider foreign law. Consequently, decisions such as Milieudefensie may serve as persuasive authority where South African courts are called upon to develop the common law or interpret constitutional rights.[24]

The Constitution itself supports this approach. Section 24 guarantees everyone the right to an environment that is not harmful to their health or well-being and obliges the state to protect the environment for present and future generations through reasonable legislative and other measures. Climate change also implicates the rights to life (section 11) and dignity (section 10), reinforcing the argument that corporate activities contributing to climate-related harm cannot be viewed solely through the lens of environmental regulation.[25]

South African company law likewise provides a basis for greater corporate accountability. Section 76(3) of the Companies Act 71 of 2008 requires directors to act in the best interests of the company and to exercise reasonable care, skill and diligence. As climate-related risks increasingly affect corporate value, regulatory compliance and long-term sustainability, it is arguable that directors who disregard those risks may fall short of this statutory standard. This interpretation is consistent with King IV’s emphasis on ethical leadership, sustainable development and responsible corporate governance.[26]

Although no South African court has yet adopted the reasoning in Milieudefensie, decisions such as Fuel Retailers Association of Southern Africa v Director-General: Environmental Management, Mpumalanga and Earthlife Africa Johannesburg v Minister of Environmental Affairs demonstrate the courts’ willingness to interpret environmental obligations purposively and in light of sustainable development. These principles suggest that, if confronted with similar facts, South African courts may be receptive to recognising a corporate duty to respond adequately to climate-related risks.[27] In my opinion, South African courts should embrace this reasoning, as our constitutional framework is uniquely well‑suited to integrate environmental protection with human rights and corporate governance.

Ⅴ CONCLUSION

Climate change litigation has evolved beyond challenging misleading environmental claims. As this article has demonstrated, courts are increasingly concerned with whether corporations are taking meaningful steps to address the climate risks created by their operations. Decisions such as Milieudefensie and ClientEarth illustrate that corporate accountability is no longer measured solely by the accuracy of sustainability statements, but also by the adequacy of corporate governance, climate strategy and decision-making.

This article has argued that the emergence of corporate inaction litigation represents a significant development in climate jurisprudence. Rather than creating entirely new legal obligations, courts have relied on established principles of private law, company law and human rights to scrutinise corporate responses to climate change. Although South African courts have not yet adopted this approach, the Constitution, the Companies Act 71 of 2008 and the country’s environmental jurisprudence provide a sound legal foundation for its future development. As climate-related risks continue to intensify, South African courts should be prepared to ensure that corporate climate responsibility is measured not only by what companies promise, but by what they do.

Bibliography

Cases

ClientEarth v Shell plc [2023] EWHC 1137 (Ch).

Earthlife Africa Johannesburg v Minister of Environmental Affairs and Others [2017] ZAGPPHC 58; 2017 (2) SA 519 (GP).

Fossielvrij NL v KLM Royal Dutch Airlines (District Court of Amsterdam, C/13/741127 / HA ZA 23 640, 20 March 2024, ECLI:NL:RBAMS:2024:1512).

Fuel Retailers Association of Southern Africa v Director-General: Environmental Management, Department of Agriculture, Conservation and Environment, Mpumalanga Province and Others 2007 (6) SA 4 (CC).

Milieudefensie et al v Royal Dutch Shell plc (District Court of The Hague, C/09/571932 / HA ZA 19-379, 26 May 2021).

Shell plc v Milieudefensie [2024] ECLI:NL:GHDHA:2100 (Hague Court of Appeal, English translation).

Legislation

Companies Act 71 of 2008.

Constitution of the Republic of South Africa, 1996.

Secondary Sources

Cormac Cullinan, Wild Law: A Manifesto for Earth Justice (2nd edn, Green Books 2011).

Institute of Directors in Southern Africa, King IV Report on Corporate Governance for South Africa 2016.

Jacqueline Peel and Hari M Osofsky, Climate Change Litigation: Regulatory Pathways to Cleaner Energy (Cambridge University Press 2015).

Joana Setzer and Catherine Higham, Global Trends in Climate Change Litigation: 2024 Snapshot (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science 2024).

Lynda Warren, ‘Review of Wild Law: A Manifesto for Earth Justice by Cormac Cullinan’ (2004) 16(2) Journal of Environmental Law 259.

OECD, Protecting and Empowering Consumers in the Green Transition: Misleading Green Claims (OECD Digital Economy Papers No 375, 2025).

[1] Shell plc v Milieudefensie [2024] ECLI:NL:GHDHA:2100 (Hague Court of Appeal, English translation) section 1; section 3.3–3.4.

[2] OECD, Protecting and Empowering Consumers in the Green Transition: Misleading Green Claims (OECD Digital Economy Papers No 375, 2025) 10–15.

[3] Ibid 10.

[4] ibid 11–15.

[5] ibid 9–15.

[6] Fossielvrij NL v KLM Royal Dutch Airlines (District Court of Amsterdam, C/13/741127 / HA ZA 23‑640, 20 March 2024, ECLI:NL:RBAMS:2024:1512).

[7] Ibid.

[8] Ibid.

[9] See eg Jacqueline Peel and Hari M Osofsky, Climate Change Litigation: Regulatory Pathways to Cleaner Energy (Cambridge University Press 2015) 3–12; Joana Setzer and Catherine Higham, Global Trends in Climate Change Litigation: 2024 Snapshot (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science 2024) 2–8.

[10] Cormac Cullinan, Wild Law: A Manifesto for Earth Justice (2nd edn, Green Books 2011) 33–45; Lynda Warren, ‘Review of Wild Law: A Manifesto for Earth Justice by Cormac Cullinan’ (2004) 16(2) Journal of Environmental Law 259, 259–262.

[11] Milieudefensie et al v Royal Dutch Shell plc (District Court of The Hague, C/09/571932 / HA ZA 19-379, 26 May 2021); Shell plc v Milieudefensie (The Hague Court of Appeal, Case No 200.302.332/01, 12 November 2024).

[12]Shell plc v Milieudefensie (n 1) paras 7.1–7.2.

[13] ClientEarth v Shell plc [2023] EWHC 1137 (Ch).

[14] Ibid 10 – 27.

[15] ibid 44 – 58.

[16] Shell plc v Milieudefensie (n 1) paras 7.6–7.27 (climate change, human rights and corporate responsibility) and paras 3.3–3.16 (scientific background).

[17] Ibid paras 7.6–7.27.

[18] Ibid 3.3–3.16.

[19] Ibid.

[20] Ibid 7.27.

[21] ibid 7.2, 7.26 – 7.28, 7.58.

[22] ibid 3.30–3.41, 7.63 – 7.68.

[23] ibid 8.1 – 8.2, 7.111.

[24] Constitution of the Republic of South Africa, 1996 ss 39(1)(b)–(c); Shell plc v Milieudefensie (n 1).

[25] Constitution of the Republic of South Africa, 1996 ss 10, 11 and 24.

[26] Companies Act 71 of 2008 s 76(3); King IV Report on Corporate Governance for South Africa 2016 Principles 1, 3 and 5.

[27] Fuel Retailers Association of Southern Africa v Director-General: Environmental Management, Department of Agriculture, Conservation and Environment, Mpumalanga Province and Others 2007 (6) SA 4 (CC) paras 44–61; Earthlife Africa Johannesburg v Minister of Environmental Affairs and Others [2017] ZAGPPHC 58; 2017 (2) SA 519 (GP) paras 81–98.