A miner’s guide to novel claims

Authors: Mark Smyth, Partner; Timothy Stutt, Partner

This article is also featured on our dedicated Mining ESG hub, along with a range of other insights and resources to help you navigate the ESG landscape.

In a time when investors, representative groups and climate activist groups across the world continue to scrutinise every action of corporate entities and governments, litigation is increasingly being used to pursue climate outcomes. Recent developments including the Sixth Assessment Report (AR6) and the forthcoming UN Climate Change Conference (COP26) will intensify this scrutiny and potentially lead to further claims on novel bases.

A number of recent challenges have been successful, and may form important sources of new legal duties and obligations for companies in emissions-intensive sectors. Others have not resulted in favourable judgments, but have succeeded in gaining publicity, obtaining leverage in negotiations, or influencing decisions.

In this article we shed light on trends we’re seeing unfold in the novel claims space, and what you need to consider in mitigating risks for your business.

What types of novel claims are being brought?

Claims have been initiated on the basis of a wide range of actions, including human rights law, continuous disclosure obligations, directors’ duties, criminal law and tort law.

Novel claims have recently targeted:

  • new project approvals and investment decisions with emissions-intensive consequences;
  • government decisions, grants and policies impacting climate change;
  • companies’ alleged failure to take action to reduce emissions; and
  • companies setting emissions reduction targets and making public statements alleged to give rise to ‘greenwashing’.

Recent examples include:

  • a decision of the Australian Federal Court considering project approval for a mine extension, which found that a government minister owed a novel duty of care to protect Australian children from the potential harmful implications of climate change;
  • a Dutch Court held that Royal Dutch Shell owed a duty of care to Dutch residents which required it to amend its emissions target to aiming to reduce emissions by net 45% by 2030;
  • in the United States, the Securities and Exchange Commission is investigating a large investment bank for misleading clients about the nature of its sustainable investment offerings;
  • the State of Vermont has commenced proceedings against a group of energy companies for making false or exaggerated statements to consumers concerning the impact of their businesses on the environment;
  • the Australian Federal Court is considering a challenge to a leading energy and resources company’s net zero emissions target, alleging that there are not reasonable grounds to expect it can be achieved; and
  • an environmental representative group has recently commenced a challenge to the licence approvals for coal-fired power stations in Victoria, alleging that the regulator failed adequately to take account of climate change and broader environmental issues in granting the approvals.

Our tips to mitigate the risks associated with novel claims

The litigation context of novel claims is shifting quickly.

In making investment and project approval decisions that may have significant emissions consequences, companies should be aware of new legal duties which may affect business decisions, as well as the ways in which threats of novel action can be brought to bear to change decisions, including through applying direct pressure and pressure on key stakeholders (including institutional investors and government).

Boards will be expected to exercise reasonable care and diligence in corporate decision-making to ensure that:

  • they have taken reasonable steps to determine the environmental / climate change strategy of the business;
  • they have tested that management has appropriate systems and processes in place to achieve that strategy;
  • that statements on climate-related issues are made on reasonable grounds, where the company has a clear plan to achieve any relevant targets and has the intention and resources to do so. Any assumptions on which targets are based should be clearly disclosed;
  • that investment decisions align with the company’s stated objectives and strategy or, where they do not, there is some reasonable basis for the departure; and
  • the market is kept informed of material information on matters relating to the company’s climate strategy, and risk and disclosures are accurate and complete.

We are seeing that the types of claims formulated in one country are often adopted by activists in others, so staying across global developments will be invaluable.

Ultimately, it’s worth remembering that even unsuccessful novel claims can still cause unnecessary cost and delay – and this could have dire consequences for time-sensitive project approvals.

Key takeaways

Navigating climate change litigation is becoming increasingly complex as activist groups bring novel claims with greater frequency. Companies and boards should be considering the legal duties which are emanating out of successful novel claims, and the influence novel claims have on leverage during negotiations and publicity more generally.

Mark Smyth
Mark Smyth
+61 2 9225 5440
Timothy Stutt
Timothy Stutt
+61 2 9225 5794
Melanie Debenham
Melanie Debenham
+61 8 9211 7560
Heidi Asten
Heidi Asten
+61 3 9288 1710

COP26: What can we expect for the mining sector?

Author: Jay Leary, Partner and Global Head of Mining

This article is also featured on our dedicated Mining ESG hub, along with a range of other insights and resources to help you navigate the ESG landscape. To learn more about COP26, visit our COP26 hub.

Few industries have as much at stake at the UN’s climate conference as mining. We size up the risks, rewards and key issues.

The mining sector is well versed in both the pressure to achieve meaningful emissions reduction and the opportunities to contribute to the clean energy transition. In the past year, there has been a proliferation of government, corporate and project-level net zero commitments by 2050, or more ambitious timeframes.

The United Nations Climate Change Conference (COP26) will further drive ambitious net zero commitments and the focus on delivering emissions reductions sooner with firmer outcomes, rather than aspirational targets. With mining at the sharp end of this global debate, we assess the pressure points and key issues for the extractive industries.


COP26, along with the broader global push for a cleaner and greener mining sector, creates challenges and opportunities across the industry. Some important issues for mining participants to consider include:

  • Investment in greener operating methods and emissions reduction technologies to meet emissions targets and decarbonise, such as electrification and use of hydrogen-powered technologies, with support from public and private finance.
  • Shifting demand for critical minerals arising from the acceleration towards electric vehicles and the uptake of renewables.
  • Continued focus of shareholders and financiers on emissions reduction targets, climate reporting, climate change policies and commitments and any new actions from COP26.
  • Agreement regarding the carbon pricing mechanisms under Article 6 of the Paris Agreement and potential associated compliance costs.

COP26 goals and implications for the mining sector

COP26 welcomes world leaders to make commitments to align with the target of achieving net zero carbon dioxide emissions by 2050 in accordance with the Intergovernmental Panel on Climate Change special report Global Warming of 1.5 ºC. The conference will focus on four key goals: mitigation, adaption, finance and collaboration. Below are key areas where COP26 may impact the mining sector.

  • Greener operations: The call for ambitious emissions reduction targets and the focus on energy efficiency means a renewed focus on the emissions intensity of mining operations. Therefore, there will need to be a continued focus on greener mining operations, including cleaner energy sources, projects for the deployment of technology and joint ventures to investigate cleaner operating methods. Electrification and use of hydrogen in mining operations, as well as other carbon abatement technologies, will continue to be increasingly important across the sector.
  • New coal commitments: COP26 refers to the phasing-out of thermal coal and scaling up of clean power among the actions that countries should take to achieve net zero. Mining companies should monitor and consider any new commitments on coal energy generation and investment in coal projects made by governments and businesses. These commitments may impact future project approvals and access to capital, finance and insurance for existing and future coal projects.
  • Shifting demand for critical minerals: Another action to achieve net zero that has been flagged for discussion at COP26 is the acceleration towards electric vehicles and renewables. This has implications for demand for critical minerals, which are components of these technologies, including copper, lithium, aluminium, nickel and rare earths.
  • The role of financiers: The COP26 goals recognise the importance of governments and financial institutions in funding the energy transition. The goals emphasise that these parties have a key role to play in facilitating investment in emissions reduction technologies and may extend to those with applications in the mining sector. (For further detail on climate finance, refer to our legal briefing).
  • Collaboration: The conference’s objective of collaboration underscores the opportunities for global, cross-sectoral partnerships to address the challenges of climate change. COP26 may create further opportunities for mining sector participants to work with governments, industry peers, supply chain stakeholders and broader society to address climate change in new ways (and potentially in light of new global goals).

Carbon pricing mechanisms

One of the goals of COP26 is to finalise the rulebook setting out the operational framework for the Paris Agreement, which includes agreeing the carbon pricing mechanisms under Article 6. Agreement regarding carbon pricing may increase compliance costs for mining companies in jurisdictions with low levels of reporting or no carbon pricing. Any new carbon pricing regimes should be examined in detail to determine their impact.

For in-depth analysis on carbon market mechanisms and COP26, refer to our legal briefing.

Mobilising action and opportunities

COP26 is likely to reinforce trends in the mining sector, including increased regulation aimed at emissions reduction and accelerating the energy transition, climate change litigation, investor expectations and activism on climate, climate disclosures and sustainable financing. The conference will provide challenges and opportunities for the mining sector to mobilise and lead on climate change and ESG issues more broadly.

Jay Leary
Jay Leary
+61 8 9211 7877 / +61 7 3258 6619