Recent trends in ESG litigation
The emergence of ESG litigation indicates that ESG litigation will become more frequent and numerous in the Netherlands. Not only in Environmental (ESG) litigation is trend is observable but also in relation to Social (ESG) litigation. Most cases involving ESG are initiated by means of class actions in the Netherlands. This is no surprise, as class actions are particularly suited for legal actions and claims to the benefit of collective or common interests. Especially since the introduction of the Act on Collective Damages in Class Action (WAMCA), which entries into force as from 1 January 2020. The WAMCA resulted in in amended/expanded possibilities for class actions in the Netherlands (please refer to our earlier posts on the 'One year class actions under the WAMCA' and the 'Class action for damages in the Netherlands'). We expect that the WAMCA will form a driving force of the increase in ESG litigation in the Netherlands and more specifically the further development of horizontal enforcement of human rights against (corporate) companies through the corporate duty of care.
The anticipation for the future extends beyond just ESG (class action) litigation, as this is no longer the sole impetus driving this trend. Recent developments reveal that both Dutch and European legislators have initiated ESG legislative measures, empowering private enforcement of human rights and civil liability against companies within the realm of ESG.
How to deal with the increasement of ESG litigation risks?
In light of the growing significance of ESG considerations, it is advisable for companies to adopt a proactive and transparent stance toward ESG matters by, for example, implementing an appropriate ESG (corporate) Governance. Neglecting to do so could potentially render the company and its board of directors vulnerable to ESG-related litigation, including class actions.
For those interested in delving deeper into the recent developments on ESG litigation, we offer a trend report in which we expound upon our insights regarding the potential implications of the recent ESG trends for Dutch companies. This report is conveniently accessible below.
ESG litigation is a fast developing field. Our team is closely monitoring the developments concerning ESG and potential liability and (class action) litigation risks in this respect. Please do not hesitate to contact one of our colleagues for more information about ESG litigation in the Netherlands.