Global law firm Baker McKenzie and Trench Rossi Watanabe*, in collaboration with the World Economic Forum, have published a new report examining how understanding climate litigation risk has become a strategic imperative for companies, boards and senior leadership worldwide.

The report, “Climate Litigation: From Compliance to Strategic Imperative”, finds that climate litigation has matured into being viewed as a systemic business risk, with direct implications for corporate strategy, governance, capital allocation and market access. Across jurisdictions, courts and regulators are increasingly treating climate change as a legal risk that must be anticipated, managed and disclosed at board level.

The report identifies five global trends that are fundamentally changing how climate risk translates into legal exposure for businesses. These include: the expansion of liability beyond a company’s own operations to its entire value chain; growing court scrutiny of whether climate transition plans are reflected in project approvals and capital investment; and the rise of rights‑based and duty‑of‑care claims that challenge how boards consider foreseeable climate risks. At the same time, greenwashing litigation is intensifying as climate commitments and sustainability claims are treated as legally significant representations, while litigation‑driven policy shifts are increasingly influencing regulation, markets and investor expectations. 

Together, these trends show how climate litigation is moving from isolated disputes to a systemic force shaping corporate governance and strategic decision‑making.

Alyssa Auberger, Chief Sustainability Officer of Baker McKenzie, said:
“What we are seeing globally is increased scrutiny on climate claims and disclosures. Plaintiffs in climate litigation are taking a close look at what companies are disclosing on climate and how they are appreciating climate risk. For boards and executives, this means that, to avoid becoming the target of climate litigation, control and oversight must be exercised over climate claims and disclosures made by the company to ensure that they are grounded in fact and treated with the same rigor and appreciated in the same manner as any other material legal or financial risk.”

Renata Amaral, Partner, Trench Rossi Watanabe*: “Across regions, climate litigation is converging around a clear expectation: climate risk must be governed with the same rigor as any other material legal or financial risk. Courts are no longer focused on whether companies acknowledge climate change, but on whether climate considerations are embedded in governance, strategy and decision‑making. In many cases, litigation is filling gaps where policy and practice lag, and in doing so it is influencing regulation, investor expectations and market behavior.”

Drawing on comparative analysis across Europe, North America, Latin America, Asia Pacific and Africa, the report shows that litigation is increasingly being used not only to challenge individual corporate actions, but also to influence regulatory frameworks, investor expectations and market behavior. Courts are paying closer attention to whether climate considerations are integrated into enterprise risk management, transition planning and public disclosures, rather than treated as aspirational sustainability commitments.

A key conclusion of the report is that litigation risk most often arises from incoherence or gaps not just between public climate commitments and operational reality, but also between transition plans and capital allocation, or between stated value chain expectations and actual oversight mechanisms. 

The report underscores the importance of viewing litigation as an early signal of broader policy and market change, rather than solely as a backward‑looking compliance concern.

The report is available here.

*Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.