DENMARK Trends and Developments Contributed by: Jacob Skude Rasmussen, Catherine Schutz and Alexander Højmark, Gorrissen Federspiel
ESG Disputes Introduction
have failed to act in a sustainable or environ- mentally conscious manner. These claims pri- marily arise in tort obligations that are owed to citizens. A prominent example of this is the liti- gation brought by a class action of NGOs and citizens in the Netherlands against Shell in the Dutch court. In 2021, the Hague District Court ruled in favour of the plaintiffs and ordered Shell to reduce its carbon emissions by 45% by 2030, which was overruled by the Hague Court of Appeal in November 2024. Increasingly, these claims are not claiming typi- cal monetary damages, but asking courts to require states or companies to take specific action, like the Shell claim in the Netherlands. Such a case also arose in Denmark, where NGO the Climate Movement brought a suit against the Ministry of Transportation and development company By & Havn I/S, seeking an injunction to stop the construction of the Lynetteholm man- made island in Copenhagen. The court declined to impose a temporary injunction while the case is processed, but no final decision in the case Because environmental concerns are becoming more important to consumers, companies are increasingly using their environmental creden- tials as a form of advertising for their products. However, if these environmental credentials are not sufficiently supported, these companies can be accused of “greenwashing” – ie, using mis- leading environmental claims to persuade con- sumers to buy their products. Greenwashing is a violation of the Danish Mar- keting Practices Act (DMA). As Danish compa- nies are increasingly including environmental claims in their advertising, claims that these has yet been reached. Greenwashing litigation
Denmark is no exception to the global trend of an increasing number of disputes directly or indi- rectly involving environmental, social and gov- ernance (ESG) issues. ESG generally refers to standards that are used to measure the environmental and social impact of corporate activity. The specifics of what is included in ESG are amorphous, sprawling and ever-changing. However, the environmental part of ESG generally asks what impact the company is having on environmental issues like climate change, CO2 emissions and pollution; the social part of ESG asks what impact a company is hav- ing on social issues like human rights and diver- sity; and the governance part of ESG assesses corporate structure concerns like executive compensation and board diversity. There is no doubt that ESG issues are becom- ing increasingly important to individuals, states and companies themselves. As this importance grows, so do ESG-related disputes, placing greater demand on companies and counsel to respond to this developing area of disputes practice. Background of ESG disputes Of course, ESG disputes have been around for quite some time. Originally, ESG disputes were somewhat limited to state actors typically bring- ing claims against companies or other state actors for alleged breaches of ESG commit- ments in law or treaty. In the past decade, however, there has been an increase in the number of ESG claims brought by individual actors (primarily class actions spear- headed by NGOs) against states and compa- nies, alleging that these states and companies
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