As places around the globe are increasingly affected by climate impacts, courts are being asked a simple but game-changing question: can corporations be held responsible for the climate-related harm they contribute to? We not only have to deal with the adverse impacts of climate change but also with other threats and problem areas, such as biosphere loss and freshwater scarcity. Large companies often have an influence on those aspects, which must not be neglected. How can law contribute to more sustainable business?
Climate litigation has become an increasingly important tool. Through climate lawsuits and other forms of sustainability litigation, activists, victims of natural disasters and other concerned citizens are suing companies to hold them accountable for their actions. But is this really yielding any noteworthy outcomes or are corporations simply too powerful?
Luciano Lliuya v. RWE AG – a David vs. Goliath battle
The lawsuit of Luciano Lliuya v. RWE AG drew a lot of attention because of its novel nature. In this dispute, a farmer from Peru lodged a claim against RWE, which is the major power company in Germany. He stressed that global warming contributes to the melting of a glacier in the vicinity of his hometown, which forces him to take measures in order to avoid damage due to floods. RWE has caused approximately 0.47 per cent of all greenhouse gas emissions since industrialization (later adjusted to 0.38 per cent due to emission reductions achieved by RWE since the filing of the suit). Therefore, Lliuya argued that they are thus also responsible to pay the same share of the costs of his protective measures.
Initially, a German provincial court dismissed his claim, stating that there is no direct causality between the emissions of RWE and the threat he is facing. However, in the appeal proceedings, the Higher Regional Court of Hamm did not follow the reasoning brought by the first instance and initiated the gathering of evidence. After a lengthy assessment of the situation, which also included a site visit of two judges and surveyors, the court finally delivered its judgement in May 2025.
In its reasoning, which soon drew criticism, the Court relied on the reports created after the gathering of evidence in Peru. According to them, the risk of an impairment of Lliuya’s property within the next 30 years was just one per cent. This clearly does not suffice for damage claims against RWE to arise. Therefore, the court dismissed the lawsuit, dashing the hopes of establishing an important precedent.
From Peru to Pakistan
However, was this ruling even a setback at all? The Court only ruled that no compensation claims could be granted in Lliuya’s individual case. The more important question was whether companies could be held liable for their greenhouse gas emissions under German tort law. The Higher Regional Court clearly answered in the affirmative. It acknowledged that there is a causal link between RWE’s emissions and natural disasters on the other side of the planet. The Court was also not convinced by the ‘drop in the ocean’ argument brought by RWE. Here, the company tried to relieve itself from any liability, arguing their emissions only account for a tiny fraction of the global greenhouse gas output.
It was therefore only a question of time before similar attempts would follow, with the aim of finally establishing the precedent for future lawsuits. Indeed, just five months later, in October 2025 Roda Verheyen announced the launch of another claim against the company. In it, the lawyer who already handled Lliuya’s case, is representing 43 Pakistani farmers demanding damages from RWE and Heidelberg Materials, a German cement manufacturer.
The key difference to the prior case: While Lliuya was seeking compensation for preventive measures aiming to reduce the impact of (hypothetical) future disasters, the Pakistani farmers are already victims of a major natural catastrophe. In 2022, their home region was affected by heavy rainfalls, which eventually led to long-lasting floods. They suffered serious impacts, among which the displacement of 33 million persons, crops wiped out and entire districts being under water for more than a year. All of this was presumably caused (or at least intensified) by the German companies’ emissions.
The case came before Court in December 2025. Suspense is building over what the court will decide this time. The argument of a supposedly too unlikely risk of damage clearly does not apply here. However, it is not evident that damages will be granted. So far, German jurisprudence has not dealt with the question whether companies also can be held liable for already occurred climate damages.
An avenue to climate justice?
Looking beyond Germany, it becomes clear that many have great expectations for such lawsuits. Just days before the new lawsuit against the German corporations was announced, claims were brought against Shell in the United Kingdom. Following the 2021 Typhoon Rai in the Philippines, 67 survivors are seeking redress for the damages caused by the disaster, which include more than 400 lost lives and 3.2 million displaced persons. Like in Germany, such a claim is relatively new to the British legal system, raising hopes for a landmark decision.
With the outcomes of these cases still unclear, the increasing number of similar claims is putting more and more pressure on Carbon Majors, the most polluting entities. What failed in Peru might now succeed with lawsuits involving real, documented damage. Just one successful claim would almost certainly attract countless others, demanding compensation for past or possible future disasters. Such a ruling would surely mean a positive turn of events for global climate justice. However, the question remains: can these companies ever truly account for the scale of devastation they have caused?
