In April, the European Court of Human Rights (ECHR) made a landmark decision that a group of more than 2,000 Swiss women had successfully established that Swiss climate change policies had not provided them with effective protection from climate change’s effects. According to the judges, this constituted a violation of their rights under Article 8 of the European Convention on Human Rights, which guarantees the right to family and private life. However, in June, the lower house of the Swiss parliament voted to reject the ECHR’s ruling, claiming that Switzerland is already doing enough to combat climate change. Nevertheless, Switzerland’s response does not completely nullify ECHR’s original decision—the ruling still sets a significant legal precedent and could have far-reaching implications for governments and businesses across Europe.
As governments face legal challenges and implement stricter climate regulations, companies in turn can expect increased regulatory pressure to take action on climate change. There are also reputational risks to consider, as businesses that fail to address climate concerns may face public scrutiny and potential legal challenges of their own. ECHR’s ruling may accelerate the trend toward sustainable investments, potentially affecting businesses’ access to capital. Additionally, companies may need to reassess their supply chains to ensure compliance with evolving climate standards. In light of the original ruling and the broader climate litigation trend, businesses should proactively address their environmental impacts.
The first step is to implement comprehensive emissions tracking across operations and supply chains. The process of quantifying environmental impact is essential for identifying areas of improvement and tracking progress. Following this initial measurement, companies should set clear, science-based emissions reduction targets for both the short and long terms, aligning with emerging legal standards. These targets provide a roadmap for sustainability efforts and demonstrate a commitment to meaningful action in the face of increasing regulatory and legal pressures.
With emissions measured and targets set, the next step is to integrate sustainability across all operations, including prioritizing climate responsibility for all C-suite executives, not just sustainability officers. For example, make it the CFO’s business to know whether the company’s investments contribute to greater or lower carbon emissions, not just a larger or smaller financial bottom line. Get your CTO on board with using technologies that can swiftly help identify the company’s emissions hotspots and greatest environmental impacts, as well as those that will help identify the best strategies for reduction and assist in tracking progress.
As companies take these steps, transparency becomes increasingly important. Businesses should enhance their disclosure of climate-related risks and mitigation efforts to all stakeholders, internally and externally, including investors and regulators. Being open about climate risks builds trust and prepares companies for increased scrutiny. To avoid potential allegations of greenwashing, it is crucial to develop robust internal processes to ensure accuracy and verifiability of sustainability claims.
The ECHR ruling represents a significant shift in the legal landscape surrounding climate action. While it directly addresses government policies, its ripple effects will inevitably reach the business world. Companies that proactively address climate concerns and align their strategies with emerging legal and regulatory expectations will be better positioned to navigate this rapidly changing landscape and move toward a sustainable future.