UK Law and Practice Contributed by: Ruth Knox and Julian Wolfgramm-King, Paul Hastings LLP
2027. Scope 3 emissions follow on comply-or-explain from 1 January 2028, with broader S1 sustainability disclosures from 1 January 2029. Large private com - panies are not yet in scope but the Government is expected to consult through Modernising Corporate Reporting (MCR). The MCR programme is expected to consult on extending UK SRS requirements to private companies following existing Streamlined Energy and Carbon Reporting thresholds (ie companies with 500+ employees or GBP500m+ turnover). The UK SRS requires disclosure in respect of gov - ernance, risk management, strategy and metrics and targets. For UK SRS S2, Scope 1, 2 and 3 GHG emis - sions must be measured in accordance with the GHG Protocol Corporate Standard. The FRC will oversee preparers’ compliance and has published detailed FAQ guidance on sustainability reporting develop - ments. Transition Finance Market Review In April 2022, UK Government launched the Transi - tion Plan Taskforce to develop a framework to help companies develop and communicate their plan to achieve net zero to their stakeholders. The Taskforce subsequently published the Transition Plan Taskforce Disclosure Framework. DESNZ published a consulta - tion in June 2025 on implementation routes for the Transition Plan Taskforce Disclosure Framework, how - ever a proposal for mandatory transition plan disclo - sures is yet to materialise. 4.2 Directors’ Climate Change Liability See 2.6 Climate Litigation (The Shell decision – Sec - tion 172 and Section 174 Companies Act). In the decision of McGaughey v Universities Superannua- tion Scheme Ltd [2023], the Court of Appeal held that derivative claims on behalf of a pension trustee com - pany against certain directors and former directors were dismissed on the basis that the derivative claim procedure which founded the claim that the directors had breached their general duties by failing to plan for fossil fuel divestments was available only in excep - tional circumstances. 4.3 Shareholder or Parent Company Liability As a technical matter under English law, it is possible for shareholders or a parent company to be held liabil -
ity in respect of damages caused by climate change and/or breaches of climate change regulation. The two most recent authorities which would underpin this scenario under English law are (i) Vedanta Resourc- es plc and another v Lungowe & others [2019] and Okpabi and others v Royal Dutch Shell plc [2021]. In the Vedanta case, 1826 Zambian residents brought a claim against Vedanta, a UK incorporated parent company and its subsidiary, Konkola Copper Mines plc, which was incorporated in Zambia, for personal injury, loss and damage caused by the discharge of waste from a cooper mine. The Supreme Court held that there was sufficient evidence to establish a triable case against Vedanta on the issue of whether Vedanta owed a duty of care to the Zambian residents. This decision was based on the established general prin - ciples for liability under tort law, and was determined through examining the high level of control exerted by Vedanta over Konkola Copper Mines plc evidenced in part through the group-wide environmental policies and procedures through which Vedanta exercised such control. Similarly, in Okpabi , a group of Nigerian residents liv - ing in an area impacted by leaks from pipelines and infrastructure operated by the Shell Petroleum Devel - opment Company of Nigeria alleged that the spills had caused damage in breach of the duties of care owed by the subsidiary and parent company. The Supreme Court again permitted the claims to be heard before the English courts on the basis that there was suf - ficient evidence of control exercised by the parent company over the subsidiary to raise a triable issue of whether there was a duty of care owed by the par - ent company to the Nigerian residents. Four related claims are now pending before the English courts. Finally, in Municipio de Mariana v BHP , BHP was held strictly liable as polluter under the Brazilian Environmental Law in November 2025 in respect of the collapse of the Samarco dam. The municipalities had standing to bring proceedings in the UK. BHP exercised control over Samarco’s activities, includ - ing its short and long-term strategy, investments, production, financial and technical risk assessment and management through the audit process, fund - ing arrangements and the payment of dividends. The 2025 decision held that controlling shareholder power
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