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Climate change is one of the most pressing global issues of our time, and businesses have a significant role to play in addressing it. The Paris Agreement, which was adopted in 2015 by countries from all around the world, aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit it to 1.5 degrees.

Litigation Implications

Businesses can be held liable for their contributions to climate change through various forms of litigation. For example, some countries and municipalities have brought lawsuits against large emitters, such as fossil fuel companies, for their role in causing climate change and the associated damages. The state of Massachusetts and California have sued oil companies. In November 2022, the state of New Jersey filed a lawsuit against Chevron and other fossil fuel companies in an attempt to force them to pay for the damages incurred by the severe weather made worse by climate change.


In addition, investors and shareholders are increasingly filing lawsuits against companies for not disclosing or managing the risks of climate change. They argue that companies have a duty to disclose the risks they face from climate change and the steps they are taking to address them, and that failure to do so is a violation of their fiduciary duty.

Another area where businesses may be held liable for not complying with the Paris agreement is related to human rights. The United Nations has identified the impacts of climate change as a human rights issue, and some groups are arguing that companies that contribute to climate change may be held liable for violating human rights, such as the right to life, health and adequate housing.

Overall, as the understanding of the risks and impacts of climate change evolves, the potential for litigation against businesses that do not comply with the Paris Agreement and other climate agreements will likely increase. It’s important for companies to understand these risks and take steps to address them in order to mitigate their potential liability.

In March 2022, 

The Securities and Exchange Commission today proposed rule changes that would require registrants to include certain climate-related disclosures in their registration statements and periodic reports, including information about climate-related risks that are reasonably likely to have a material impact on their business, results of operations, or financial condition, and certain climate-related financial statement metrics in a note to their audited financial statements. The required information about climate-related risks also would include disclosure of a registrant’s greenhouse gas emissions, which have become a commonly used metric to assess a registrant’s exposure to such risks.” (Source: https://www.sec.gov/news/press-release/2022-46).

Science and Sensor Driven Climate Benchmarks

In light of these prominent developments and the increasing scientific data and climate change projections (IPCC),  companies may need to reevaluate their discussion of climate change risks in SEC filings and other public statements from company officials. They may be fined or sued if they fail to do so. Our company’s Floodlight Invest flagship product, called SAGE, delivers asset level measurements of greenhouse gases for Scope 1 and 2. Before direct measurement, companies relied on guesswork and manual surveys to generate an inventory of emissions; this process typically took 4-12 months. Using direct, sensor measurements, an up-to-date inventory of emissions can be created in days with clear, transparent–and most importantly–unbiased accuracy.

We expect that there is going to be increasing interest in this climate change space in the legal system. We are providing data products in this space based on scientific methodology and satellite and other geospatial data observations and metrics. The common practice is to use company disclosed information on emission in their sustainability (ESG – Environment, Social and Governance) reporting. This reporting leads to greenwashing as companies may underreport their emissions or not provide the right metrics.  

Floodlight provides the following information that can assist law firms in their practice of climate change law and regulations. Our advanced geospatial data metrics help assess GHG emissions analysis and mitigation for new and expanding industrial, commercial, and residential development projects. We also assist you in assessing climate risks such as wildfires, sea level rise, flooding, hurricanes, water issues and other risks by providing scientifically validated data products to assist you in litigation on these topics.

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