Rethinking Climate Litigation: A New Era for Corporate Sustainablity Leadership

Climate litigation is increasingly becoming integral to corporate strategy. Recent findings indicate that its scope is broadening across various sectors, challenging sustainability leaders to adapt.

The 2026 edition of the Global Trends in Climate Change Litigation report from the Grantham Research Institute at the London School of Economics highlights over 3,600 climate cases initiated since 1986. Impressively, more than 75% were filed post-Paris Agreement in 2015, and the number of countries involved has surged from 17 to 62 in just a decade. In 2025, alone, there were 249 new cases.

What's particularly alarming for companies is the trajectory of these lawsuits. In 2025, over 50 strategically aligned climate cases were filed against a diverse range of industries, accumulating to 434 since 2015. This expansion now encompasses sectors beyond energy, including finance, transportation, real estate, and consumer goods, targeting entities throughout emissions-intensive supply chains.

The Dispersal of Risk

One vital takeaway from the report is how legal strategies are shifting. Businesses may find themselves facing lawsuits based on their contributions to climate change, governance practices, transition plans, and accuracy in environmental claims. To illustrate, climate washing alone has resulted in at least 226 cases globally since 2015. Other key areas of concern include failure to adapt to climate impacts and governance-related lawsuits.

The evolving legal landscape means that even companies not directly linked to fossil fuels face climate-related legal risks. Decisions around financing, supply chain, infrastructure, marketing, and resilience can all expose firms to litigation.

Sustainability teams need to adopt a holistic view to assess potential legal exposure. This involves understanding how climate considerations impact major business decisions, which jurisdictions are relevant, the organization’s public assertions, and where specific climate risks could jeopardize operations.

The Need for Accountability in Climate Communication

Climate washing stands out as a prominent issue. The report reveals that over 65% of climate washing cases resolved so far have favored the claimants. Interestingly, annual filings dropped sharply from 58 in 2023 to just 31 in 2025. This trend likely reflects a growing recognition among corporations of the risks tied to unsubstantiated environmental claims.

Importantly, the report warns that greenhushing—staying silent about environmental claims—won't shield companies from legal exposure. It emphasizes that well-supported transition plans and transparent disclosures are vital for mitigating risk.

Such findings suggest an urgent need for sustainability communications to be grounded in solid evidence. Corporate environmental claims should be rooted in credible methodologies, clearly linking goals to actionable steps. Communications teams cannot simply address claims at the end; the integrity of a climate assertion relies on the strength of sustainability practices.

Climate Litigation and Risk Assessment

The report illustrates how legal risks extend beyond individual companies, encompassing interconnected relationships within corporate networks. Notably, various financial entities and state-owned enterprises are implicated in at least 42 strategic climate litigation cases, with over 40% filed since 2023. Insurers and shareholders are stepping forward as claimants, seeking recovery for losses stemming from climate-related extreme weather events, while regulators sharpen their focus on climate and environmental risk assessments.

This reality necessitates that sustainability teams expand their scope to include traditionally non-sustainability areas such as supplier diligence, capital allocation, and environmental impact assessments. Addressing these interconnected challenges will likely demand collaboration across legal, risk, finance, operations, communications, and sustainability functions.

The regulatory environment is rapidly diversifying, particularly regarding ESG criteria, while legal strategies are increasingly transnational as litigants and courts share learnings from different jurisdictions. Companies with a global footprint must grasp these nuances to navigate their risk exposure effectively.

Elevating the Role of Sustainability Leadership

There's a tendency to react to climate litigation only after a lawsuit has been initiated, which is typically too late to influence underlying business decisions. Key questions arise: How are climate risks factored into investment strategies? Are environmental claims substantiated with evidence, and is there tangible alignment between transition plans and capital expenditure? Is there adequate consideration of physical climate risks during asset planning? Companies must also recognize their potential legal exposure throughout their supply chains and markets.

These are essential sustainability queries that now carry significant legal and financial implications. The Grantham report underscores that climate litigation is now a fixture in global climate governance, with cases involving a diverse spectrum of stakeholders—governments, corporations, banks, and financial institutions. As litigants increasingly learn from one another across various jurisdictions, sustainability leaders should view litigation trends as indicators of future expectations around corporate climate performance. Recognizing these shifts early can empower companies to make informed decisions long before they need to mount a legal defense.