When balance sheets pollute: Litigating the climate change-related human rights impacts of financial institutions

Abstract

How is climate litigation being used to compel financial institutions (FIs) to fulfil their baseline responsibility to respect human rights? Under the UN Guiding Principles on Business and Human Rights, FIs must not cause, contribute to or be directly linked to adverse human rights impacts arising from their own operations as well as their business relationships. Translating this responsibility to the climate crisis, civil society and affected rightsholders are initiating legal actions against FIs globally. They are seeking (1) the measurement, disclosure and alignment of Scope 3 emissions of FIs with the Paris Agreement goals, and (2) the divestment or disengagement of FIs from projects, clients, or sectors characterized by high greenhouse gas intensity. This article analyzes 14 domestic court and OECD National Contact Point cases collected from five databases, illuminating a recent “rights-turn” in climate litigation concerning the financial sector.