ESG case: Peruvian farmer sues German energy giant

In an unusual but potentially precedent-setting ESG case, a Peruvian farmer named Saúl Luciano Lliuya has brought a lawsuit against Germany’s largest utility company RWE for contributing to global warming.

Winning the lawsuit would require RWE to pay for flood defences to protect his hometown of Huaraz from the risk of a melting glacier nearby, as reported in the FT. 

The emissions produced by RWE over its 124-year history have contributed to global warming

Lliuya claims that as the emissions produced by RWE over its 124-year history have contributed to global warming, which has melted the glacier, and his town is liable to compensation, despite RWE having no operations in Peru. 

This is thought to be the first lawsuit to see a resident of one country seek compensation for a polluter based elsewhere

The choice was made to target RWE in particular, as opposed to another company, as the case is being pursued through German courts and because RWE continues to operate coal facilities. 

A precedent for whether, in the face of the climate crisis, the largest emitters worldwide must finance compensation

If the case is successful, experts predict that a large number of similar compensation cases could follow around the world from claimants targeting high emissions companies, as this is thought to be the first transnational lawsuit of its kind to see a resident of one country seek compensation for a polluter based elsewhere.

The case is “a precedent for whether, in the face of the climate crisis, the largest emitters worldwide must finance protection and compensation for damages on a pro rata basis for the people affected by the consequences,” says Germanwatch.

Article by Sillion.