Climate litigation as a new dimension of corporate responsibility

Global emissions, local liability – Hamm Higher Regional Court does not shut the door on climate litigation, contrary to widespread expectations 

The legal action brought by Peruvian farmer Lliuya against RWE to assume the costs of flood protection measures, which he based on a scientifically determined proportion of RWE's contribution to global emissions since the beginning of industrialisation, can be seen as a precedent. At the end of May, the claimant seemed to lose before Hamm Higher Regional Court, but in fact it only appears that way at first glance. The dismissal of the legal action was based (solely) on the court's assessment that the claimant was unable to provide evidence of a sufficiently concrete probability of an outburst flood and thus a danger to the claimant's specific property (Hamm Higher Regional Court, judgment dated 28 May 2025 – 5 U 15/17). 

The decision is therefore both trendsetting and (potentially) likely to generate litigation: 

The court found that companies can generally be held liable for climate-related damage. This is contingent on a significant contribution to the cause compared to other anthropogenic CO₂ emissions and proof of a sufficiently concrete danger. Hamm Higher Regional Court also dispelled the previously widespread assumption that permits and compliance with limit values would protect companies from liability: Neither official permits nor certificates in accordance with the German Greenhouse Gas Emissions Trading Act (TEHG) or a public energy supply contract exclude civil liability if the legal system disapproves of the result of the damage – such as endangerment of the property due to glacier melt caused by emissions. The judgment thus opens up new starting points for claimants and new risks for companies. 

Climate litigation on the rise 

The case decided by the Higher Regional Court is not an isolated one. The total number of climate actions filed to date is 2,967 in almost 60 countries around the world, including 226 new climate actions in 2024 alone, over 80 % of which are classified as strategic. Lliuya's lawyer Verheyen is also not letting up: Just five months after the Higher Regional Court judgment, she is demanding more than EUR 1 million in compensation from RWE and Heidelberg Materials for farmers from Pakistan for crop losses as a result of flooding caused (allegedly) by climate change. But not only German companies are affected: The Swiss cement company Holcim has been held jointly responsible for flood damage and loss of revenue caused by climate change in a legal action brought by the inhabitants of the Indonesian island of Pari. 

One risk factor for companies is the unclear legal situation: Although Hamm Higher Regional Court affirms the merits of corporate liability, it links this to the requirement of a "certain materiality" of the emissions contribution in order to counteract a limitless liability of "everyone against everyone". The threshold that establishes this liability is not further specified by the Higher Regional Court. All it does is make a distinction between large emitters and average citizens, meaning that companies of all sizes are confronted with litigation risks that are difficult to calculate, investments are inhibited and strategic decisions are made more difficult. Though the legal position of potential claimants is still unclear, further legal actions can be expected – not least because many environmental organisations provide financial support for strategic litigation to cushion the litigation risks for claimants. 

The ICJ opinion as a catalyst: what companies can expect now 

In its opinion published in July 2025, the International Court of Justice (ICJ) categorised climate protection as a state obligation towards the international community as a whole (erga omnes). It also acknowledged a human right to a healthy and sustainable environment. This groundbreaking appraisal is likely to put not only states, but also – at least indirectly – companies increasingly under focus of national and international regulatory and judicial activities. The following developments can be expected: 

• (even) stricter limit values, 
• stricter permit requirements, 
• expanded reporting obligations, 
• a more restrictive interpretation of environmental and climate protection law. 

Companies should proactively counter climate risks 

Even if Hamm Higher Regional Court's decision is only an individual decision, the proceedings are likely to serve as a template for further legal actions. Companies should therefore bear in mind that compliance only reflects the regulatory minimum standard and that further measures are required to effectively minimise liability risks. Against this background, the implementation of the following strategic steps is particularly recommended: 

• Regular, close-meshed audits to identify and reduce liability risks, 
• Contractual protection through cost-sharing or indemnification agreements along the supply and financing chain, 
• Creation of structures (e.g. systematic safeguarding of emissions data and technical evidence), 
• Consistency between ESG reporting and procedural defence positions, as contradictions with sustainability communication can be detrimental in litigation, 
• Development of a defence strategy. 

The increasing momentum in climate litigation makes it clear that companies will increasingly be at the centre of legal disputes in the future – even if they comply with regulatory requirements. Strategic risk management that goes beyond compliance is therefore crucial, as is a forward-looking dispute strategy that identifies liability risks at an early stage and provides targeted protection against them. Companies that act now will strengthen their defence position and secure their ability to act.