Banks are threatened with their own "Dieselgate"

Banks are threatened with their own "Dieselgate". Many banks have not even processed all legal proceedings from the financial crisis, but a new storm is brewing: climate protection lawsuits. "Sustainability, that will be the next wave of lawsuits," says a top manager of a European financial institution. Banks can make themselves vulnerable because they finance climate-damaging business through loans or capital market placements. In addition, they sometimes raise expectations that are too high for so-called "green plants" that are supposed to support ecological projects. "We make too many promises that we cannot keep," warns the banker. Lawyers do not anticipate a wave of lawsuits immediately - but it could come in two or three years. According to a survey by the London School of Economics, 1,841 climate lawsuits were filed worldwide between 1986 and May 2021, 191 of them in the 13 months up to the end of May alone. In the vast majority of cases, governments are in the dock, but an increasing number of cases are also targeting companies. At the end of May, a Dutch court ordered the oil company Royal Dutch Shell to almost halve its CO2 emissions by 2030. This was the first time that a court obliged a private company to cut greenhouse gas emissions. The decision, which reflects a rethinking of the courts, could open the floodgates for similar proceedings. Influential shareholder advisor ISS sees the rulings against the tobacco and asbestos industry as examples of what companies could face in terms of climate lawsuits: the victims were awarded hundreds of billions of dollars in compensation. The climate crisis is even greater with a view to possible damage to health and prosperity.