Dear friends and members of the 2°Investing
Initiative,2ii in partnership with Minter Ellison is releasing a new report “The Carbon Boomerang: Litigation Risk as a Driver and Consequence of the Energy Transition”. The report provides an easy reader for analysts, policymakers, companies, and other stakeholders as to what litigation risk related to the transition may look like and what its implications may be for companies and financial institutions.
Based on three broad categories of claims (the failure to mitigate climate impacts, the failure to adapt to climate change and disclose, and the lack of ET-specific regulatory compliance, see Fig. below), the report highlights over 20 detailed and up to date case studies related to potential litigation risks.
This report also specifically focuses on potential securities fraud and misleading disclosure following the release of the recommendations of the FSB Task Force on Climate-related Financial Disclosures. It shows that corrective disclosures are not just a question of updating company filings – the average stock price drop on corrective disclosures for US securities class actions (not specific to transition risk) was 17% in 2015.
Published as part of the Energy Transition Risk project (funded by the EU H2020 programme), the Carbon Boomerang joins the series of our recent publications on the many facets of transition risk, including questions of adaptive capacity and transition scenarios for 2°C scenario analysis.
As always, we look forward to hearing your thoughts, feedback, and questions.
Yours truly,
The 2° Investing Initiative Team