Climate litigation risk already here for banks and insurers, says ECB legal chief

Climate litigation is no longer a hypothetical risk, but a rapidly materialising one, the London School of Economics’ ninth annual snapshot of the state of play in climate litigation shows.

Chiara Zilioli, the European Central Bank’s director general for legal services and chair of the Network for Greening the Financial System (NGFS) experts’ network on legal issues, calls the report “a must-read for the general counsels of central banks, supervisors and financial institutions” as climate litigation risk is already here.

A “wide range of financial institutions are facing materialising climate litigation risk and closer regulatory scrutiny…from banks to pension funds, from insurers to asset managers” whether “as defendants or claimants,” she says in the report’s foreword.

While last year’s report found that markets had come to accept litigation as a financially material risk , this year’s edition shows it crystallising — in courtrooms, regulatory enforcement and on balance sheets.