Net-Zero Disputes Panel at the Singapore Convention on Mediation

As countries and corporations pledge ambitious emission reductions, disputes frequently emerge over resource allocation, the pace of implementation, and liability for past and ongoing environmental harm. And as the precise responsibilities of States and Corporations in tackling climate change remain a widely debated and contentious issue, both within individual jurisdictions and on regional and global scales, a devoted to the cause Panel Discussion was held at the end of August 2024 in Singapore on Net-Zero Disputes and the role that Alternative Dispute Resolution mechanism in tackling such disputes.

During the Singapore Convention Week on Mediation 2024 organised and hosted by the Ministry of Law, Singapore and the UNCITRAL: United Nations Commission on International Trade Law in Singapore, one of our Associate Mediators at the Civil Mediation Council and expert in the field of ESG and sustainability, Dr Georgina Tsagas, was invited to moderate this thought-provoking panel with expert panel litigators from across the globe, from Australia to the United Arab Emirates and the UK, namely Belinda Ellington, Amanda Lees and Khushboo Shahdadpuri, on the topic of Net-Zero Disputes. Key insights emerged regarding the complexities of achieving net-zero targets and a discussion was had on the legal mechanisms available to address disputes in this area. The full programme of the UNICITRAL Academy Panels of the Singapore Convention on Mediation 2024 are available here

Understanding Net Zero: Beyond the Basics

Dr. Georgina Tsagas opened the discussion by highlighting that while net zero refers to balancing emissions with removals, the concept has evolved to include various greenhouse gases beyond carbon dioxide, such as methane and nitrous oxide. She noted that different industries, from energy to agriculture, face distinct challenges in their path to net zero, further complicated by the need to account for emissions across global supply chains, also known as - Scope Three Emissions -.

Global Trends in Climate Litigation

The panel showcased visuals from recent global climate trend studies, indicating a rise in climate litigation. Dr. Tsagas pointed out that while the U.S.A. has been a leader in this field, other nations are also seeing increasing legal action aimed at enforcing net zero targets. This trend reflects the growing urgency and complexity surrounding climate-related legal disputes.

Alternative Dispute Resolution (ADR) Approaches

As moderator, Dr Georgina Tsagas steered the conversation towards the potential of ADR, especially mediation and arbitration, as effective tools to address net zero disputes. The panel agreed that expertise is key, given the technical nature of issues like carbon credits and emissions measurement. Jointly the Panel Members explored how arbitration, supported by expert knowledge, could be instrumental in resolving disputes, while mediation offers a platform for more collaborative problem-solving.

Legal Challenges and Case Studies

A notable part of the discussion involved a case from the United Kingdom in 2023 where ClientEarth , a shareholder of Shell, and Non-Governmental Organisation supporting environmental objectives, sought to hold the company’s directors accountable for not aligning business practices with the Paris Agreement. The case of ClientEarth v. Shell [2023] EWHC 1137 (Ch) , dismissed by the UK High Court, underscored the challenges of enforcing net zero commitments through litigation, particularly under the UK Companies Act's business judgment rule. Dr. Tsagas emphasised that this case illustrates how different jurisdictions may vary in their approach to net zero disputes, creating challenges for global businesses, considering that a similar case in Holland was decided at first instance quite differently , since in the landmark ruling by the District Court of The Hague in 2021 held Shell accountable. In the case Milieudefensie v Royal Dutch Shell (2021), the environmental organization Milieudefensie (Friends of the Earth Netherlands), along with other NGOs and thousands of co-plaintiffs, sued Royal Dutch Shell. The court ordered Shell to reduce its global carbon emissions by 45% by 2030, relative to 2019 levels, including so-called ‘Scope 3 emissions’, namely emissions that the company is deemed responsible for up and down its value chain. The lawsuit was based on Shell's duty of care under Dutch law and its human rights obligations. The court found that Shell had a legal obligation to take more aggressive action to reduce its emissions to prevent harm to the environment and human rights. This ruling was historic because it set a precedent by holding a corporation legally responsible for its contribution to climate change on a global scale. Unlike the UK case involving Client Earth, this Dutch case directly targeted the company rather than its directors, emphasising the corporate responsibility to align business practices with climate goals.

The Ruling of the Court of Appeal of The Hague November 2024

The latest 12^th of November 2024 ruling of the Court of Appeal of The Hague overturned the District Court of The Hague’s 2021, in the case brought against Shell plc by Milieudefensie, and highlights, even more so than before, how timely and important the discussion of the Panel at the Singapore Convention was and why revisiting the role that alternative dispute resolution mechanisms alongside litigation is timely and necessary. Among other things, the Dutch Court of Appeal stated in its ruling at point 7.111: “While it follows from the foregoing that Shell may have obligations to reduce its scope 3 emissions, this cannot lead to the award of Milieudefensie et al.’s claims on this point. The court of appeal has come to the conclusion that Shell cannot be bound by a 45% reduction standard (or any other percentage) agreed by climate science because this percentage does not apply to every country and every business sector individually.”

Dr Georgina Tsagas, with some level of foresight with this ruling pending at that time, commented on the need to use experts when it comes to net zero disputes, considering how crucial it is for any decision made to be based on an objective assessment of how reduction is measured across the board. Climate litigation, as can be seen, is not just a legal challenge—it’s an intersection of law, science, and policy and from the discussion it became evident that as we move forward, it’s crucial to ensure that decisions are based on thorough expert assessments to make meaningful progress.

At the same time the Court of Appeal confirmed the Court's 2021 position on the links between climate change and human rights law. A series of national and regional climate change-related judgments, as well as various UN reports and resolutions were relied on to conclude that “there can be no doubt that protection from dangerous climate change is a human right”.

Courts recognising climate change protection as a fundamental human right marks a significant turning point in global environmental governance. This declaration underscores the urgent need for actionable frameworks to address the complexities of climate change, particularly in the realm of disputes surrounding Net-Zero commitments. By framing climate change protection as a human right, courts not only elevate its legal and moral importance, but also create a binding obligation for governments, corporations, and individuals to act decisively.

Such a judicial stance showcases the importance of the United Nations Commission on International Trade Law jointly with the Ministry of Law in Singapore having convened a global panel discussion focused on Net Zero disputes and the role of mediation specifically. As the intersection of human rights and climate change gains recognition, comments were made by key members of the panel that innovative tools and collaborative processes like mediation are essential to addressing the complexities of Net Zero disputes. This approach not only advances the pursuit of climate justice but also reinforces the idea that achieving Net Zero is not merely a legal or economic challenge—it is a moral imperative tied to the protection of human rights

Cases of the sort can also be seen as a form of tactical litigation, which, in simple terms, is when a group or organization brings a legal case to court not necessarily to win, but to raise awareness and push for change on important issues. The legal system thus also serves as a platform to highlight pressing issues and rally support for reform. As Dr Georgina Tsagas concluded: Where there’s a will, there’s a way. All forms – litigation, arbitration and mediation – can uphold different ways of addressing these net zero disputes.”

Mediation & Greenwashing

One of the audience questions brought attention to the issue of greenwashing—companies falsely claiming to meet net zero targets. Dr. Tsagas jointly with the panel explored the role of mediation in addressing such claims, suggesting that mediation could be one of the ways to ensure transparency and accountability, possibly involving experts to verify claims and resolve disputes more amicably.

A Hopeful Outlook

The session was concluded by underscoring the importance of exploring diverse legal avenues to address net zero disputes. Dr Tsagas noted that the rise in litigation and the development of ADR methods signal a need for ongoing innovation in legal frameworks to keep pace with global climate goals. Her closing remarks expressed optimism that, with the right tools and collaborative spirit, stakeholders can navigate the complexities of net zero and drive meaningful progress.

Concluding Remarks

The session provided valuable insights into the legal landscape of net zero disputes, stressing the need for both clear definitions and robust mechanisms for dispute resolution. As companies worldwide strive to meet ambitious climate targets, the legal community’s role in facilitating and enforcing these goals remains crucial.

This article originally featured in a revised version for the LinkedIn Newsletter ‘Conflict No More’