Home News & Analysis Environmental UK CGFI plans project to analyse climate-related legal risk

UK CGFI plans project to analyse climate-related legal risk

UK Centre for Greening Finance and Investment and the Oxford Sustainable Law Programme set to launch workstream in the autumn.

The UK Centre for Greening Finance and Investment (CGFI) is establishing a new theme focused on pinpointing what climate-related legal risk means in financial terms for companies, Responsible Investor can reveal.
This will be led by Dr Thom Wetzer, Director of the Oxford Sustainable Law Programme and Associate Professor of Law and Finance at the University of Oxford.
Starting this autumn, the CGFI will collaborate with investors, practitioners and regulators in translating insights emanating from the workstream into practical action.

Wetzer told RI: “It’s clear that litigation risk is real – it’s not some figment of an activist’s imagination. Investors and business leaders need to know who is exposed and how they can respond, and regulators need to have that insight too to carry out their duties.”

Climate litigation is coming into increasing focus in the ESG space. A report on global trends published in June by the Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy found that, as of 31 May, the cumulative number of cases had more than doubled since 2015, bringing the total number of cases to over 2,000.

Around a quarter of these were filed between 2020 and 2022.

Also this year, the Intergovernmental Panel on Climate Change (IPCC) recognised the role of litigation in affecting “the outcome and ambition of climate governance”.

And in a March note, ISS called on investors to integrate the threat of climate litigation within assessments of climate-related financial risks and financial modelling.

The proxy adviser noted “a clear upward trend in the use of climate litigation”, which it said would become an increasingly material risk as companies are held to account for their climate pledges and performance.

Currently, the CGFI is working on what exactly the workstream will cover on a granular level and who to partner with. Wetzer said interested parties from the private, public and non-profit sectors should feel free to reach out.
This article was updated to make it clear that the climate litigation project is not a joint project between CGFI and the Sustainable Law Project.   

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