Citation: Javier Solana. Climate change litigation as financial risk[J]. Green Finance, 2020, 2(4): 344-372. doi: 10.3934/GF.2020019
[1] | Arena M, Ferris S (2017) A Survey of Litigation in Corporate Finance. Managerial Financ 43: 4-18. doi: 10.1108/MF-07-2016-0199 |
[2] | Arena MP, Ferris SP (2018) A Global Analysis of Corporate Litigation Risk and Costs. Int Rev Law Econ 56: 28-41. doi: 10.1016/j.irle.2018.05.003 |
[3] | Armitage J (2013) Credit Rating for RBS Falls as "smallpox" Subprime Lawsuit Costs It. The Independent. Available from: http://www.independent.co.uk/news/business/news/rbs-credit-rating-falls-as-smallpox-subprime-lawsuit-costs-it-154m-8928214.html. |
[4] | Armour J, Mayer C, Polo A (2017) Regulatory Sanctions and Reputational Damage in Financial Markets. J Financ Quant Anal 52: 1429-1448. doi: 10.1017/S0022109017000461 |
[5] | As You Sow (2019) Shareholders Urge 5 Major U.S. Banks to Act on Climate. Available from: https://www.asyousow.org/press-releases/2019/11/25/shareholders-urge-banks-act-on-climate-change. |
[6] | Autore DM, Hutton I, Peterson DR, et al. (2014) The Effect of Securities Litigation on External Financing. J Corp Financ 27: 231-250. doi: 10.1016/j.jcorpfin.2014.05.007 |
[7] | BaFin (2019) Guidance Notice on Dealing with Sustainability Risks. Available from: https://www.bafin.de/SharedDocs/Veroeffentlichungen/EN/Meldung/2019/meldung_191220_MB_Nachhaltigkeitsrisiken_en.html. |
[8] | Bank of England (2019a) Life Insurance Stress Test 2019: Scenario Specification, Guidelines and Instructions. Available from: https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/letter/2019/life-insurance-stress-test-2019-scenario-specification-guidelines-and-instructions.pdf. |
[9] | Bank of England (2019b) The 2021 Biennial Exploratory Scenario on the Financial Risks from Climate Change. Available from: https://www.bankofengland.co.uk/paper/2019/biennial-exploratory-scenario-climate-change-discussion-paper. |
[10] | Barker S, Baker-Jones M, Barton E, et al. (2016) Climate Change and the Fiduciary Duties of Pension Fund Trustees - Lessons from the Australian Law. J Sustain Financ Invest 6: 211-244. doi: 10.1080/20430795.2016.1204687 |
[11] | Bauer R, Braun R (2010) Misdeeds Matter: Long-Term Stock Price Performance after the Filing of Class-Action Lawsuits. Financ Anal J 66: 74-92. doi: 10.2469/faj.v66.n6.6 |
[12] | Braithwaite T, Scannell K, McCrum D (2011) Banks Sued over Mortgage Deals. Financial Times. Available from: https://www.ft.com/content/c3656efc-d57c-11e0-9133-00144feab49a. |
[13] | Brunnermeier MK, Pedersen LH (2009) Market Liquidity and Funding Liquidity. Rev Financ Stud 22: 2201-2238. doi: 10.1093/rfs/hhn098 |
[14] | Carbon Delta (2019) Climate Change: A Growing Liability for Companies and Investors. Carbon Delta (blog). Available from: https://www.carbon-delta.com/climate-change-a-growing-liability-for-companies-and-investors/. |
[15] | Carney M (2015) Breaking the Tragedy of the Horizon—Climate Change and Financial Stability. Available from: https://www.bankofengland.co.uk/speech/2015/breaking-the-tragedy-of-the-horizon-climate-change-and-financial-stability. |
[16] | Cleary P, Harding W, McDaniels J, et al. (2019) Turning up the Heat—Climate Risk Assessment in the Insurance Sector. Financial Stability Institute insights on policy implementation No 20. Bank for International Settlements. |
[17] | Crow D, Mooney A (2020) Barclays under Pressure over Financing Fossil Fuel Producers. Financial Times. Available from: https://www.ft.com/content/d242263a-4770-11ea-aeb3-955839e06441. |
[18] | Regelink M, Reinders HJ, Vleeschhouwer M, et al. (2017) Waterproof? An exploration of climate-related risks for the Dutch financial sector. De Nederlandsche Bank. Available from: https://www.dnb.nl/en/binaries/Waterproof_tcm47-363851.pdf. |
[19] | De Nederlandsche Bank (2020) Good Practice Integration of Climate-Related Risk Considerations into Banks' Risk Management. Available from: https://www.toezicht.dnb.nl/2/50-238193.jsp. |
[20] | Deng S, Willis RH, Xu L (2014) Shareholder Litigation, Reputational Loss, and Bank Loan Contracting. J Financ Quant Anal 49: 1101-1132. doi: 10.1017/S002210901400057X |
[21] | Emons W (2017) Legal Fees and Lawyers' Compensation, In The Oxford Handbook of Law and Economics: Volume 3: Public Law and Legal Institutions, edited by Francesco Parisi. |
[22] | European Central Bank (2020) Guide on Climate-Related and Environmental Risks: Supervisory Expectations Relating to Risk Management and Disclosure. Available from: https://www.bankingsupervision.europa.eu/legalframework/publiccons/pdf/climate-related_risks/ssm.202005_draft_guide_on_climate-related_and_environmental_risks.en.pdf. |
[23] | European Commission (2019) Guidelines on Non-Financial Reporting: Supplement on Reporting Climate-Related Information. Communication 2019/C 209/01. Available from: https://ec.europa.eu/finance/docs/policy/190618-climate-related-information-reporting-guidelines_en.pdf. |
[24] | Fama EF (1970) Efficient Capital Markets: A Review of Theory and Empirical Work. J Financ 25: 383-417. |
[25] | Farrell S (2019) Lloyds to Have Last Word on Scale of PPI Scandal. The Observer. Available from: https://www.theguardian.com/business/2019/oct/27/ppi-scandal-lloyds-bank-have-last-word. |
[26] | Financial Conduct Authority (2020) Proposals to Enhance Climate-Related Disclosures by Listed Issuers and Clarification of Existing Disclosure Obligations. Consultation Paper CP20/3. Available from: https://www.fca.org.uk/publication/consultation/cp20-3.pdf. |
[27] | Gande A, Lewis CM (2009) Shareholder-Initiated Class Action Lawsuits: Shareholder Wealth Effects and Industry Spillovers. J Financ Quant Anal 44: 823-850. doi: 10.1017/S0022109009990202 |
[28] | Garz H, Hassl T, Oviedo S, et al. (2014) Sector Report: Banks—Like a Phoenix from the Ashes? Sustainalytics. Available from: https://marketing.sustainalytics.com/acton/attachment/5105/f-08ba/1/-/-/-/-/Sector%20Report%202014%2007%20Banks.pdf. |
[29] | Giuzio M, Krušec D, Levels A, et al. (2019) Climate Change and Financial Stability. Financ Stab Rev. Available from: https://www.ecb.europa.eu/pub/financial-stability/fsr/special/html/ecb.fsrart 201905_1~47cf778cc1.en.html. |
[30] | Goldstein M (1998) The Asian Financial Crisis: Causes, Cures, and Systemic Implications, Peterson Institute. |
[31] | Gompertz S (2019) Industry Bill for PPI Claims Could Hit £ 53bn. BBC News. Available from: https://www.bbc.com/news/business-49592643. |
[32] | Gong G, Huang X, Wu S, et al. (2020) Punishment by Securities Regulators, Corporate Social Responsibility and the Cost of Debt. J Bus Ethics, 1-20. |
[33] | Tsleil Waututh Nation, Union of British Columbia Indian Chiefs, Treaty Alliance Against Tar Sands Expansion (2017) Letter to the CEOs of the 14 Banks That Underwrote the Kinder Morgan Canada IPO. Available from: https://www.ubcic.bc.ca/bankswarnedtransmountain. |
[34] | Gu X, Hasan I, Lu H (2018) Corporate Reputation in Bond Market: Evidence from Lawsuits. Gabelli School of Business, Fordham University Research Paper No. 2872705. |
[35] | Haslem B, Hutton I, Smith AH (2017) How Much Do Corporate Defendants Really Lose? A New Verdict on the Reputation Loss Induced by Corporate Litigation. Financ Manage 46: 323-258. doi: 10.1111/fima.12171 |
[36] | Homanen M (2018) Depositors Disciplining Banks: The Impact of Scandals. Chicago Booth Research Paper No. 28. |
[37] | Intergovernmental Panel on Climate Change (2018) Special Report: Global Warming of 1.5℃ Summary for Policymakers. Available from: https://www.ipcc.ch/sr15/chapter/spm/. |
[38] | International Renewable Energy Agency (2017) Stranded Assets and Renewables: How the Energy Transition Affects the Value of Energy Reserves, Buildings and Capital Stock. Available from: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2017/Jul/IRENA_REmap_Stranded_assets_and_renewables_2017.pdf. |
[39] | ISDA (2001) User's Guide to the 2001 ISDA Margin Provisions. Available from: https://www.isda.org/book/ug-to-2001-isda-margin-provisions/. |
[40] | Jones K, Rubin PH (2001) Effects of Harmful Environmental Events on Reputations of Firms. Adv Financ Econ 6: 161-182. doi: 10.1016/S1569-3732(01)06007-8 |
[41] | Karpoff JM (2012) Does Reputation Work to Discipline Corporate Misconduct? Oxf Handb Corp Reput, 361-382. |
[42] | Karpoff JM, Lee DS, Martin GS (2008) The Cost to Firms of Cooking the Books. J Financ Quant Anal 43: 581-611. doi: 10.1017/S0022109000004221 |
[43] | Karpoff JM, Lott Jr JR, Wehrly EW (2005) The Reputational Penalties for Environmental Violations: Empirical Evidence. J Law Econ 48: 653-675. doi: 10.1086/430806 |
[44] | Klein B, Leffler KB (1981) The Role of Market Forces in Assuring Contractual Performance. J Polit Econ 89: 615-641. doi: 10.1086/260996 |
[45] | Langevoort DC (2012) Getting (Too) Comfortable: In-House Lawyers, Enterprise Risk, and the Financial Crisis. Wis Law Rev, 495-520. |
[46] | Lee EG, Willging TE (2010) Litigation Costs in Civil Cases: Multivariate Analysis. Federal Judicial Center. Available from: https://papers.ssrn.com/abstract=1606846. |
[47] | Linklaters (2019) The Rise of Green Loans and Sustainability Linked Lending. Available from: https://www.linklaters.com/en/insights/thought-leadership/sustainable-finance/the-rise-of-green-loans-and-sustainability-linked-lending. |
[48] | Loan Market Association (2019) Sustainability Linked Loan Principles. Available from: https://www.lma.eu.com/sustainable-lending. |
[49] | MacNeil I (2015) Enforcement and Sanctioning, In The Oxford Handbook of Financial Regulation, edited by Niamh Moloney, Eilís Ferran, and Jennifer Payne, Oxford: Oxford University Press. |
[50] | Makortoff K (2019) RBS Posts Quarterly Loss after Extra £ 900m Put aside for PPI Claims. The Guardian. Available from: https://www.theguardian.com/business/2019/oct/24/rbs-posts-quarterly-loss-after-extra-900m-put-aside-for-ppi-claims. |
[51] | Makortoff K, Kollewe J (2019) PPI Claims: Lloyds and Barclays Face Billions of Pounds in Extra Charges. The Guardian. Available from: https://www.theguardian.com/business/2019/sep/09/lloyds-ppi-claims. |
[52] | Marjanac S, Patton L (2018) Extreme Weather Event Attribution Science and Climate Change Litigation: An Essential Step in the Causal Chain? J Energy Nat Resour Law 36: 265-298. |
[53] | Ming WX (2018) The Banking Regulatory Bureau Imposed Penalties for the First Time on the Basis of Green Credit Guidelines: How Should the Banking Industry Respond to the New Requirements for Green Credit. Blue Map. Available from: https://mp.weixin.qq.com/s/T8VcbIZFIVMv40AAodnRSA. |
[54] | Mishina Y, Devers CE (2012) On Being Bad: Why Stigma Is Not the Same as a Bad Reputation. Oxf Handb Corp Reput, 201-220. |
[55] | Monaghan A (2013) Barclays Boss Admits It Could Take 10 Years to Rebuild Public Trust. The Guardian. Available from: https://www.theguardian.com/business/2013/dec/31/barclays-antony-jenkins-trust-ppi-libor. |
[56] | Moody's (2019) Moody's Takes Action on the Ratings of 15 UK Banks and Building Societies. Moodys.Com. Available from: https://www.moodys.com/research/Moodys-takes-action-on-the-ratings-of-15-UK-banks--PR_412737. |
[57] | Mooney A, Nauman B (2020) Climate Campaigners Turn Their Fire on the Financial World. Financial Times. Available from: https://www.ft.com/content/2a27f446-4f15-11ea-95a0-43d18ec715f5. |
[58] | Network for Greening the Financial System (2019) A Call for Action: Climate Change as a Source of Financial Risk. Available from: https://www.ngfs.net/sites/default/files/medias/documents/synthese_ngfs-2019_-_17042019_0.pdf. |
[59] | Network for Greening the Financial System (2020) Guide to Climate Scenario Analysis for Central Banks and Supervisors. Available from: https://www.ngfs.net/sites/default/files/medias/documents/ngfs_guide_scenario_analysis_final.pdf. |
[60] | New City Agenda (n.d.) The Top 10 Retail Banking Scandals: 70 Billion Reasons Why Shareholders Must Play a Greater Role in Changing Bank Culture. New City Agenda (blog). Date unknown. Available from: https://newcityagenda.co.uk/the-top-10-retail-banking-scandals-50-billion-reasons-why-shareholders-must-play-a-greater-role-in-changing-bank-culture/. |
[61] | Osofsky HM, Peel J (2012) Litigation's Regulatory Pathways and the Administrative State: Lessons from U.S. and Australian Climate Change Governance. Georget Int Environ Law Rev 25: 207-260. |
[62] | Pain N, Pepper R (2019) Legal Costs Considerations in Public Interest Climate Change Litigation. King's Law J 30: 211-223. doi: 10.1080/09615768.2019.1645432 |
[63] | Press Association (2019) CYBG Shares Plunge as It Becomes Latest Bank to Be Hit by PPI Surge. Mail Online. Available from: https://www.thisismoney.co.uk/money/markets/article-7430865/CYBG-shares-plunge-latest-bank-hammered-late-surge-PPI-claims.html. |
[64] | Prudential Regulatory Authority (2015) The Impact of Climate Change on the UK Insurance Sector. Available from: http://www.bankofengland.co.uk/pra/Documents/supervision/activities/pradefra0915.pdf. |
[65] | Prudential Regulatory Authority (2018) Transition in Thinking: The Impact of Climate Change on the UK Banking Sector. Available from: https://www.bankofengland.co.uk/prudential-regulation/publication/2018/transition-in-thinking-the-impact-of-climate-change-on-the-uk-banking-sector. |
[66] | Raudel PM, Hammer S (2016) Environmental and Climate Change Disclosure Under the Securities Laws: A Multijurisdictional Survey. Debevoise & Plimpton Client Update. Available from: https://www.debevoise.com/insights/publications/2016/03/environmental-and-climate-change-disclosure. |
[67] | Reeves J, Umbert JM (2019) Climate Change and Insurance: Litigation Risks for Insurers. Insur Law. Available from: https://www.zelle.com/news-publications-626. |
[68] | Riding S (2019) World's Biggest Pension Fund Steps up Passive Stewardship Efforts. Financial Times. Available from: https://www.ft.com/content/8e5e0476-f046-3316-b01b-e5b4eac983f1. |
[69] | van Schaik S, Morrow D, Burress S, et al. (2015) Insurance: Shedding Light on New Industry Challenges. Sustainalytics. Available from: https://marketing.sustainalytics.com/acton/attachment/5105/f-08c0/1/-/-/-/-/Sector%20Report%202015%2006%20Insurance.pdf. |
[70] | Schwarcz SL (2007) To Make or to Buy: In-House Lawyering and Value Creation. J Corp Law 33: 497-576. |
[71] | Setzer J, Byrnes R (2019) Global Trends in Climate Change Litigation: 2019 Snapshot. Policy report. Grantham Research Institute on Climate Change and the Environment. Available from: https://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2019/07/GRI_Global-trends-in-climate-change-litigation-2019-snapshot-2.pdf. |
[72] | Setzer J, Byrnes R (2020) Global Trends in Climate Change Litigation: 2020 Snapshot. Policy report. Grantham Research Institute on Climate Change and the Environment. Available from: https://www.lse.ac.uk/granthaminstitute/publication/global-trends-in-climate-change-litigation-2020-snapshot/. |
[73] | Solana J (2020) Climate Litigation in Financial Markets: A Typology. Transnatl Environ Law 9: 1-33. doi: 10.1017/S2047102520000035 |
[74] | Spicer A, Gond JP, Patel K, et al. (2014) A Report on the Culture of British Retail Banking. Available from: https://newcityagenda.co.uk/wp-content/uploads/2014/11/Online-version.pdf. |
[75] | Task Force on Climate-related Financial Disclosures (2017) Final Report: Recommendations of the Task Force on Climate-Related Financial Disclosures (June 2017). Available from: https://www.fsb-tcfd.org/publications/final-recommendations-report/. |
[76] | UNEP FI (2018) UNEP FI Working with 16 Global Insurers to Better Understand Risk & Implement TCFD Recommendations—United Nations Environment—Finance Initiative. UNEP FI. 13 November 2018. Available from: https://www.unepfi.org/news/industries/insurance/unep-fi-working-with-16-global-insurers-to-better-understand-risk-implement-tcfd-recommendations/. |
[77] | Wearden G (2011) How the PPI Scandal Unfolded. The Guardian, 5 May 2011. Available from: https://www.theguardian.com/business/2011/may/05/how-ppi-scandal-unfolded. |
[78] | Weyzig F, Kuepper B, van Gelder JW, et al. (2014) The Price of Doing Too Little Too Late: The Impact of the Carbon Bubble on the EU Financial System. Available from: https://reinhardbuetikofer.eu/wp-content/uploads/2014/03/GND-Carbon-Bubble-web1.pdf. |
[79] | Xin Q, Zhou J, Hu F (2018) The Economic Consequences of Financial Fraud: Evidence from the Product Market in China. China Account Stud 6: 1-23. doi: 10.1080/21697213.2018.1480005 |
[80] | Yuan Q, Zhang Y (2015) Do Banks Price Litigation Risk in Debt Contracting? Evidence from Class Action Lawsuits. J Bus Financ Account 42: 1310-1340. doi: 10.1111/jbfa.12164 |