Climate change litigation trends report: Insights for corporates and financial institutions

In June, the Grantham Research Institute on Climate Change and Environment published its 2026 annual snapshot report (the “Report”) on global climate litigation trends. The Report analyses the current state of climate litigation worldwide and confirms that it remains a key risk area for corporates and financial institutions.

In 2025, 249 new climate cases were filed. The United States remained the leading jurisdiction with 151 cases, followed by Brazil, Australia, the United Kingdom and Germany. Cases were also filed for the first time in new jurisdictions, including Malaysia, Singapore and Zambia.

Consistent with previous years, around 70% of new cases were filed by NGOs and individuals. Most claims have historically targeted governments, but private actors – particularly companies – are increasingly being targeted.

New frontiers in climate litigation against the private sector

The Report identifies three new frontiers in climate litigation against private parties.

First, the range of defendants continues to widen: strategic litigation is now being brought against a broader set of actors, including the real estate industry, state-owned enterprises and institutional investors. This reflects growing recognition among claimants that responsibility for climate action extends beyond fossil fuel producers, and litigants’ increasing sophistication in identifying actors across emissions-intensive supply chains.

Second, while individuals and NGOs remain the largest pool of claimants, the Report highlights a widening circle of actors with a financial stake in climate outcomes. Examples include insurers bringing subrogation claims, governmental and quasi-governmental bodies using their enforcement powers, and shareholders filing derivative claims such as failure to adapt and misleading disclosure claims.

Third, 2025 saw new methodologies emerge that seek to link corporate actors and economic activities to climate change impacts in new cross-cutting ways. Brazil, home to the largest concentration of incidental polluter pays cases globally, illustrates this through its environmental civil liability regime, which imposes strict, joint and several liability, applies a broad definition of “polluter” that includes indirect contributors, and requires full reparation across ecological, economic and moral dimensions.

In addition, the Report identifies new areas where further climate litigation may emerge. These include cases involving infrastructure related to carbon dioxide removal and storage, such as landowners concerned about safety risks associated with the new technologies; cases relating to the environmental impact of large data centres; and cases on other environmental issues such as plastic pollution. 

Extending attribution to financial institutions

Continuing a trend identified in previous reports, an increasing number of claims are being brought against financial actors such as banks, as improved methodologies make it easier for litigants to link financial flows to emissions.

Parties are using various tools to attribute climate-related harm to banks and financial institutions and to quantify their financed emissions. For example, the Partnership for Carbon Accounting Financials allocates a share of a borrower’s emissions to each financier based on their share of the company’s enterprise value, while the LINGO UK Overseas Carbon Bombs tracker measures UK banks’ contributions to the world’s largest proposed fossil fuel expansions. The Report suggests such tools may be tested in cases such as Milieudefensie v ING, which argues that ING’s emissions reduction policies – particularly on financed and scope 3 emissions – are insufficiently aligned with the Paris Agreement. Building on Milieudefensie v Shell, the case argues that ING’s climate conduct breaches the societal duty of care under the Dutch Civil Code and that its failure to adopt effective emissions reduction policies is tortious.

Financial institutions have also faced turning off the taps litigation, a growing category challenging public and private finance flows to high-emitting activities. For example, in Hirji et al. v Canada Pension Plan Investment Board, youth claimants argue that the pension manager is mismanaging its exposure to fossil fuel assets and failing to adequately model and disclose climate-related financial risks, and that the ICJ’s advisory opinion may increase the transition risks facing fossil fuel investments.

Regulatory enforcement has also increased. The European Central Bank’s (“ECB”) actions signal that supervisors now treat climate and environmental risk as a material financial consideration: in February this year, the ECB imposed penalty payments of over €7,500,000 on Crédit Agricole for failing to adequately assess the materiality of its climate-related and environmental risks by the required deadline.

Financial institutions therefore need robust due diligence to assess and address the climate-related and environmental risks in their investments, reducing exposure to litigation and regulatory enforcement.

Non-climate-aligned cases 

Non-climate-aligned cases neither straightforwardly advance nor oppose climate action, but typically arise from disputes over how and where climate action is implemented, and at whose cost. The Report discusses developments in three such areas.

Just transition is an established area of non-climate-aligned litigation, covering cases brought by or on behalf of individuals and communities who are, or expect to be, structurally disadvantaged by climate action measures. These cases span a broad geographical range and typically engage three dimensions of justice - distributive, procedural and recognition. More than half of the just transition cases filed in 2025 alleged harmful impacts from locally implemented climate projects, grounded in recognition or procedural justice, and called for the transition to be implemented with dignity, equity and respect for rights rather than opposing climate action outright. Even so, such cases carry practical risks, including project delays, court-mandated modifications, financial losses and potential cancellations.

Another established area is green v green litigation, which arises where climate policies negatively affect other aspects of the environment, particularly biodiversity. Courts continue to be asked to balance the need for rapid decarbonisation against obligations to protect ecosystems threatened by renewable energy projects. This trend is most prominent in Germany, though claims have also been filed in India, Romania and Australia.

The Report also suggests that adaptation-related claims may become more prominent. Historically underrepresented compared to climate mitigation cases, climate change adaptation cases may relate to a state’s obligation to implement adaptation measures under human rights law, the inadequacy of adaptation measures implemented, or disputes over who is responsible for paying the costs associated with the need to adapt to the effects of climate change. The increasing prominence is partly due to the ECtHR’s finding in Verein KlimaSeniorinnen Schweiz and Others v. Switzerland that Convention parties must implement and effectively apply adaptation measures based on the best available evidence, and the ICJ’s confirmation that states must ensure such measures are in place. The maturation of systemic polluter pays cases, which centre on the costs of adaptation, loss and damage, together with the growing urgency of adaptation in the absence of sufficient mitigation, may further increase litigation risk in this area.

Legislative Barriers to Climate Litigation

As claimants in some jurisdictions begin to make inroads in establishing corporate liability for climate change before the courts, legislators are increasingly seeking to constrain such claims. In some jurisdictions, legislative intervention is targeting climate litigation by seeking to create liability shields for companies facing climate-related claims. For example, in New Zealand, Parliament has passed legislation to remove tort liability for climate change harm caused by greenhouse gas emissions. The move is in direct response to the case of Smith v Fonterra. A similar bill has been proposed in Bavaria, Germany.

Conclusions

Climate change litigation remains a continuing risk for corporates and financial institutions, with new actors and sectors increasingly being targeted. In 2025, improved technologies enabled claimants to trace emissions to economic activities, driving a new focus on financed emissions. Non-climate-aligned litigation also continued to develop, with the more established just transition and green v green cases now potentially joined by adaptation-related claims, reflecting the growing need to address climate adaptation in the absence of sufficient mitigation measures. At the same time, emerging legislative efforts to limit or shield companies from climate-related liability may shape the future trajectory of such claims in some jurisdictions.

Companies and financial institutions should therefore continue to monitor these developments and assess their exposure to climate and ESG-related litigation and regulatory risk across their operations, disclosures and financing activities.

See our blog posts on the Grantham Research Institute’s previous annual snapshot reports for 2025, 2024 and 2023.

 See also: Insights | Disputes Briefcase - July 2026