Exclusive: Fossil fuel companies register drop in value after litigation or unfavourable judgments
May 22, 2023 | Source: The Guardian | by Isabella Kaminski
Climate litigation poses a financial risk to fossil fuel companies because it lowers the share price of big polluters, research has found.
A study to be published on Tuesday by LSE’s Grantham Research Institute examines how the stock market reacts to news that a fresh climate lawsuit has been filed or a corporation has lost its case.
The researchers hope their work will encourage lenders, financial regulators and governments to consider the effect of climate litigation when making investment decisions in a warmer future, and ultimately drive greener corporate behaviour.
The study, which is currently being peer reviewed, analysed 108 climate crisis lawsuits around the world between 2005 and 2021 against 98 companies listed in the US and Europe. It found that the filing of a new case or a court decision against a company reduced its expected value by an average of 0.41%.