MAC: Mines and Communities

Executives facing climate denial-related claims could be personally liable

Published by MAC on 2014-05-29
Source: Greenpeace, WWF, CIEL,

A group of NGOs, featuring Greenpeace, have sent letters to the executives of several major carbon companies, asking a few simple questions: Do you think you could be personally liable if your company was found to have misled regulators, investors or the public about the risks of climate change? Are you sure? And, if you aren't, what is your company doing to ensure it does not produce or promote misleading information about climate change?

The companies involved include, among others, Alpha Natural Resources, Arch Coal, BHP Billiton, Freeport-McMoRan Inc., Glencore Xstrata, Holcim, Lafarge & Peabody.

Executives facing climate denial-related claims could be personally liable - NGOs

Joint press release

28 May 2014

Corporate executives of major fossil fuel companies could face personal liability for funding climate denialism and opposing policies to fight climate change, say NGOs.

Greenpeace International, WWF and the Center for International Environmental Law have written to the executives of large insurance corporations as well as fossil fuel and other carbon major companies [1], seeking clarity on who will pay the bill if such a lawsuit is brought against their directors or officers [2].

Generally, liability policies provide coverage for claims that put individual directors' and officers' assets at risk. These liability policies protect individuals who are conducting their business in good faith but are at risk of being held liable for undesirable business occurrences, which may be beyond their control. However, a serious question is whether these policies would cover a director facing a climate-related claim [3].

Leanne Minshull, Greenpeace International's Climate and Energy Campaigner, says the cost of climate change is personal. "It's personal to the victims of super typhoon Haiyan who lost family members and homes in the Philippines. It's personal to farmers in California and Australia whose land is now too dry for farming. It should also be personal for any oil, gas and coal company directors who mislead the public by funding climate denialism and stopping action on climate change. The responsibility - not just the devastating effects - should be personal."

Carroll Muffett, President of the Center for International Environmental Law says from "asbestos to tobacco to oil spills, history shows that those who mislead the public, the market or the government about the risks of their products, or the availability of safer alternatives, can face substantial legal liability, both as companies and as individuals. As the impacts of climate denialism and regulatory obstruction become clear, we want to understand how corporations, insurers, and officers and directors are allocating those risks among themselves. Just as importantly, we ask what steps they're taking to prevent the misconduct that creates those risks in the first place."

Samantha Smith, leader of WWF's Global Climate and Energy Initiative says fossil fuel companies owe it to their shareholders and the public to tell us the truth about the devastating impacts of their activities on our shared climate. "Sooner or later, those who hide the facts and oppose policies to fight climate change will be held to account by the courts. By signing this letter, we hope to bring attention to the importance of truthful, transparent and responsible corporate reporting and policy engagement on climate change."

The responses from the fossil fuel companies and insurers and will be published on the Greenpeace International website.


Notes for Editors:
[1] Research identifies 90 entities - referred to as "carbon majors" - as the largest historic contributors of cumulative worldwide emissions of industrial CO2 and methane between 1854 and 2010.
Richard Heede.2014. Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 1854-2010, CLIMATIC CHANGE, Vol. 122, Issue 1-2, pp 229-241, January 2014.
[2] To read the letters and see the list of recipients please go to:
[3] For more information on climate change litigation, please see: D. Zegart. 2014. Want to Stop Climate Change? Take the Fossil Fuel Industry to Court, The Nation, 21 April 2014. Last visited on 23 April 2014.

For more information please contact:
Leanne Minshull - Greenpeace +3146162025 leanne.minshull[at]
Mandy Jean Woods - WWF +27 72 393 0027 mwoods[at]
Amanda Kistler - Center for International Environmental Law +1 339-225-1623 akistler[at]

Enviros question if insurers will cover climate risks to executives

28 May 2014

Three environmental groups are questioning whether insurers would cover oil and gas executives in lawsuits that accuse them of deliberately misleading the public about the impacts of climate change.

The groups sent letters to dozens of energy companies today asking them to review their insurance policies, noting that false or incomplete information distributed about the effects of fossil fuels could pose "a risk to directors and officers personally."

"The question that this letter seeks to ask them is whether they believe they are covered in the event that a subsequent jury were to find that they mislead regulators, mislead consumers, mislead the markets about the risk involved in the use of their products," said Carroll Muffett, president and CEO of the Center for International Environmental Law. "We are not prejudging the answer to that."

The CIEL, along with Greenpeace and the World Wildlife Fund, also sent letters to global insurers to ask whether their policies would protect executives against financial damage stemming from climate-related court cases. The groups gave ClimateWire a copy of the letter yesterday but declined to reveal the recipients.

Insurers have increasingly been pulled into court cases involving climate. Last month, Farmers Insurance Co. sued Chicago and nearly 200 surrounding municipalities for allegedly failing to prevent flooding that may have been exacerbated by rising temperatures. In 2012, Steadfast Insurance Co. won a court case that freed it from defending its policyholder, electric utility AES Corp., in a lawsuit alleging that AES contributed to climate change through its emissions.>

Some insurers and other experts predict that climate change could lead to a growing number of legal fights as impacts like rising seas and heavier rainfall contribute to financial losses. Other risks might come from investors who could allege that a company's board of directors or officers downplayed the risks of climate change to their bottom line.

Directors and officers are often protected against making "misstatements" to shareholders through D&O insurance policies. William Passannante, a lawyer with Anderson Kill who tracks insurance law, said it's likely that an oil and gas executive who deliberately misled the public about the impacts of his company's emissions would be protected by a D&O policy.

"In a classic sense, those sorts of claims would probably be covered," Passannante said. "It's supposed to be exceptionally broad."

The environmental organizations are willing to leave it to the courts, drawing parallels with earlier cases involving tobacco and asbestos. Muffett pointed to advances in research that identifies specific companies and their emission output, and correlations to certain climatic impacts from a designated amount of carbon dioxide, as evidence that could be used in legal cases.

"The science is better and better at identifying specific harms to specific communities that are caused by climate change and quantifying those harms," Muffett said. "Those are the links in the causal chain that I think [industry] actors have assumed wouldn't be filled. And now they're being filled in."

Home | About Us | Companies | Countries | Minerals | Contact Us
© Mines and Communities 2013. Web site by Zippy Info