Glen and his co-authors’ paper provides the first robust evidence on the impact of climate litigation against corporations. The authors compile data on 108 climate change lawsuits against US and European-listed corporations from 2005 to 2021. They find that climate litigation filings or unfavourable court decisions reduced firm value by an average of -0.41%. The most significant market responses occurred in cases against major emitters ("Carbon Majors") and cases involving novel legal arguments or new jurisdictions. Filings against non-Carbon Majors showed no statistically significant effect. The study suggests that climate litigation risk should be considered a relevant financial risk for lenders, financial regulators, and governments in a warmer future.
This paper received the 'Best Paper Award' at the Global Research Alliance on Sustainable Finance and Investment conference in August 2023.