In brief
- Ground-breaking research published by the Earth Commission suggests even more urgent and radical action is needed to safeguard an equitable, liveable future for all.
- As governmental and corporate progress stalls, or even goes into reverse, the gap between necessary transformations and current approaches is widening.
- The longer meaningful action is delayed, the steeper the transformation curve will become, and strategic litigation against corporates and governments for failures to act is growing fast.
- The Earth Commission's definition of "safe and just" boundaries for human activity could well accelerate existing trends in climate litigation, as well as fostering renewed focus on other environmental risks, such as nature and biodiversity.
- Most corporates require significant business model transformation, both to limit exposure to rising physical, transition and litigation risks, and to seize opportunities, in a market context defined by the worsening impacts of ecological breakdown.
The "safe and just" corridor for people and planet is shrinking
Authored by over 60 leading natural and social scientists, the recent Earth Commission report, A just world on a safe planet, delivers a stark warning. It concludes that the planet will only be able to support even a basic standard of living for everyone in the future if economic systems and technologies are dramatically transformed, and if access to and use of critical resources are more equitably shared.
That conclusion is based on groundbreaking work to quantify a set of "safe and just Earth Systems Boundaries" (ESBs). This advances previous research on planetary boundaries by considering what is necessary to equitably provide for people's wellbeing, as well as ensuring the stability and resilience of Earth systems.
Critically, when justice considerations are added – minimising exposure to harms, equitably distributing resources and meeting minimum access needs – this tightens the space within which all of humanity and the planet can thrive.
Operating within the ESB for climate change, for example, would require limiting global warming to 1ËšC above pre-industrial levels – a boundary not only lower than the Paris Agreement target of 1.5ËšC, on which all net-zero strategies have thus far been based, but one that has already been breached.
Meanwhile, already insufficient progress is slowing or reversing
Just as scientists are calling for even more urgent and radical action, recent evaluations suggest that governments and companies are far from achieving existing goals.
For example, last year's global stocktake of Nationally Determined Contributions (NDCs) toward the Paris Agreement revealed that, even if fully implemented, these would lead to between 2.1ËšC and 2.8ËšC of warming – well above the current 1.5ËšC target, let alone the 1ËšC proposed by the Earth Commission report.
Meanwhile, a recent World Benchmarking Alliance examination of more than 800 companies, across 20 industries, reveals equally alarming trends. Underscoring why new regulations increasingly demand a double materiality approach to assessing sustainability risks and impacts, it finds that fewer than 5% of companies have assessed the impact of their operations on nature, fewer than 1% understand their business model's dependencies on ecosystem services, and not a single company is holistically assessing and disclosing both.
Additionally, we've seen worrying slowdowns or even reversals of progress. For example, data centre expansion and surging AI use have seen Microsoft's and Google's emissions rising sharply (in Google's case by 48% vs. its 2019 baseline year). And many other businesses, including feted corporate sustainability leaders, such as Unilever, have been scaling back or pushing out their big sustainability commitments.
A widening sustainability gap escalates physical, transition and litigation risks
The gap between what the science says is necessary to secure an equitable, liveable future and what current policies and strategies are delivering is getting bigger, not smaller. The longer those policies and strategies fail to come to terms with the unfolding reality of Earth systems breakdown – and the rising social inequality and geopolitical tensions intertwined with it – the steeper the transformation curve will become.
As the body of evidence builds that 'green growth' strategies are not decoupling (and are arguably incapable of decoupling) growth from adverse impacts at anything like the pace and scale required to bring economic activity back within the safe and just operating space, so the curve of strategic litigation is likely to rise more steeply too.
The Earth Commission report could accelerate existing litigation trends
At its core, strategic litigation aims to affect major societal shifts and to hold institutions to account for the insufficiency of their plans. With its emphasis on the need for systemic transformations, and the intersectionality of ecological and social justice concerns, it's possible that the Earth Commission report will accelerate existing and emerging trends.
For example, multiple landmark climate litigation cases – among them Urgenda v. Netherlands, Milieudefensie v. Shell and KlimaSeniorinnen v. Switzerland – have been based on human rights arguments, maintaining that insufficient action to tackle climate change contravenes citizens' rights to life under Articles 2 and 8 of the European Convention on Human Rights (ECHR). The Earth Commission report's conclusion that avoiding people's exposure to significant harm requires limiting the average global temperature rise to 1ËšC (a boundary already breached) will surely increase the likelihood of such cases being brought.
In particular, the report's emphasis on equity and justice could well intensify focus on the growing number of cases in the Global South – a trend already expected to increase as more cases are brought in relation to climate migration, and the rights of Indigenous peoples and other populations whose lives and livelihoods are disproportionately impacted by climate change.
Additionally, the report's definition of ESBs beyond climate change – e.g., safe and just limits in relation to maintaining intact nature, and nitrogen and phosphorus pollution caused by excessive fertiliser use – could support fresh focus on other types of environmental risk, especially concerning nature and biodiversity. Whereas damages-based climate claims may be slowed by causation issues, requiring complex attribution science, causation in biodiversity and deforestation claims can more readily be established by supply chain tracing, with the result that such claims may escalate faster.
A shared "to-do" list?
While narrow interpretations of fiduciary duty paint a trade-off between meaningful action on sustainability and maximising short-term returns, the real trade-off is between short-term returns and mid- to long-term business continuity and resilience. Substantive business transformation is no longer an option if companies wish to limit rising physical, transition and litigation risks, and to build the capacity to survive and thrive in an era increasingly defined by the worsening impacts of ecological breakdown.
In essence, there can be no such thing as a sustainable business in an unsustainable world – i.e., no business can expect to succeed over the mid-long term if, by its actions or inaction, it degrades the health of the people, resources and ecosystem services upon which it relies to function.
When this is acknowledged, as the BSI standard for Purpose Driven Organisations (PAS808:2022) describes, it becomes clear that achieving wellbeing for all within the means of a flourishing planet isn't just the goal of sustainability; it should be the ultimate objective of business and the economy, too. In other words, the "to-do" lists for securing an equitable, liveable future, and for securing business continuity, are aligned.
How can we help?
Transforming our businesses and economies, in a way that secures a just a sustainable future, requires bold action and leadership.
For those looking for robust, clear-eyed counsel, Mishcon de Reya has an unusual depth of knowledge and experience to support you. This includes in-house capability in data science and global group actions management through Somos, which, along with our litigation finance venture, MDR Solutions I, provides a strong platform for us to build, identify and fund claims.
For those seeking to drive transformational change within their organisations, we advise corporates, boards and leaders on ESG issues and evolving directors' duties, combining lawyers and sustainability professionals to develop sustainability strategies and governance frameworks, and then to implement them.
Visit our Mishcon Purpose page to find out more.