When are statements published about your business more than just positioning, and how far can they be relied upon before they become the subject of legal scrutiny?
For many organisations, Environmental, Social and Governance (ESG) statements sit within branding, investor relations and corporate messaging. They are used to signal direction, values and long-term commitments. Historically, such statements carried limited litigation risk. They were seen as aspirational, forward-looking and, in many cases, too general to give rise to legal consequences. That position is changing.
The issue is no longer simply what a company says about itself, but whether those statements are capable of being relied upon, challenged, and tested in court. What was once regarded as corporate messaging is increasingly being treated as a potential representation, with legal consequences where it is said to be inaccurate, overstated or misleading.
This shift is being driven by a combination of regulatory pressure, investor expectations and the increasing sophistication of claimants. Regulators are focusing closely on so-called “greenwashing” and misleading ESG disclosures. At the same time, investors and counterparties are placing greater reliance on public statements when making decisions. That combination creates the ideal conditions in which disputes can arise.
In litigation terms, ESG statements are beginning to follow a familiar path. Claims are typically framed as misrepresentation, deceit, or, in the context of listed companies, under statutory regimes such as sections 90 and 90A of the Financial Services and Markets Act 2000. The core allegation is straightforward: that a public statement was inaccurate or misleading, that it was relied upon, and that loss has been suffered as a result. What is notable is not the legal mechanism itself, but the subject matter to which it is now being applied.
Statements concerning sustainability, ethical sourcing, emissions targets, diversity or governance structures are no longer treated as purely reputational. Where they are expressed in sufficiently clear or absolute terms, they may be characterised as statements of fact rather than opinion. That distinction is critical. Once a statement crosses into the territory of fact, it becomes capable of forming the basis of a claim.
The difficulty for many businesses is that ESG statements often sit somewhere in between. They may be intended as forward looking or aspirational, but are expressed in language that appears definitive. A statement such as “we operate a fully sustainable supply chain” carries a very different risk profile to “we are working towards improving sustainability across our supply chain”. The former invites scrutiny as to its accuracy; the latter signals direction without asserting a present fact.
The risk is therefore not confined to deliberate misstatement. It arises more commonly from overstatement, lack of qualification, or a failure to distinguish clearly between current position and future intention.
Current Litigation and Regulatory Pressure
This shift is not theoretical. It is already reflected in the types of claims being brought and the regulatory action being taken in 2026. In the environmental context, litigation is increasingly targeting misleading sustainability claims. Businesses are being challenged on statements relating to environmental impact, supply chains and ethical practices where those statements cannot be substantiated.
At the same time, there is a growing focus on supply chain accountability. Claimants are seeking to hold UK-based parent companies responsible for environmental damage and human rights issues arising within overseas operations. A prominent example is the ongoing group litigation against BHP in relation to the Fundão Dam collapse in Brazil, with a further trial stage expected to proceed in 2026. The significance of that case lies not only in its scale, but in the willingness of the English courts to entertain claims against a parent company for environmental harm caused abroad. Similarly, claims against the Dyson Group concerning alleged labour abuses within its Malaysian supply chain demonstrate the increasing willingness of claimants to pursue UK-headquartered businesses for harm said to arise within global operations.
Regulatory scrutiny has also intensified. The Advertising Standards Authority has continued to intervene where environmental claims cannot be substantiated, requiring businesses to withdraw or amend statements that are considered misleading. The Competition and Markets Authority has updated its guidance on environmental claims, making clear that enforcement action will follow where businesses repeat or disseminate unsupported “green” statements.
In parallel, the Financial Conduct Authority is increasingly focused on the quality and reliability of ESG-related disclosures, particularly within financial markets. Recent developments indicate a move towards aligning UK Sustainability Reporting Standards with international frameworks and improving consistency in climate-related disclosures. The introduction of new disclosure rules under the Public Offers and Admissions to Trading Regulations regime, including provisions relating to forward-looking statements on transition plans and net-zero targets, reflects an attempt to balance transparency with legal risk. The FCA has also taken steps towards bringing ESG ratings providers within its regulatory remit, recognising that investors may be relying on sustainability metrics that are inconsistent or insufficiently robust.
Alongside this, the Prudential Regulation Authority has increased expectations on firms to identify, assess and manage climate-related risks, including through stress testing and defined risk appetite frameworks. These developments reinforce the importance of ensuring that public ESG statements are aligned with internal risk assessments and governance structures. There is also an ongoing statutory framework which underpins this area. The Modern Slavery Act 2015 continues to require large commercial organisations to publish annual statements addressing forced labour risks within their operations and supply chains. Failures or inconsistencies in those disclosures may give rise to both regulatory scrutiny and litigation risk.
Taken together, these developments demonstrate a clear shift. ESG statements are no longer insulated as corporate messaging. They are being tested against underlying operational reality, and where a gap emerges, that gap is increasingly being explored through regulatory action and civil claims.
Where ESG Litigation Is Going
The trajectory of ESG litigation is being shaped not only by current claims, but by emerging legislative frameworks. In the UK, proposals for a new Forced Labour and Human Rights Bill suggest a move towards mandatory supply chain due diligence and enhanced reporting obligations, replacing the current transparency-based regime. If implemented, this would significantly increase the level of scrutiny applied to corporate supply chain statements.
At a European level, provisional agreement has been reached on revisions to the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. While aspects of those regimes have been scaled back, the direction remains clear. Larger organisations will be required to engage with sustainability reporting and due diligence in a structured and legally accountable way. At the same time, the courts are demonstrating an increasing willingness to deal with ESG disputes at scale.
The Mariana Dam litigation, one of the largest mass tort claims brought in the English courts, signals a clear readiness to handle complex, high-value, cross-border environmental claims. The case raises fundamental questions as to the extent to which parent companies can be held accountable for the actions of overseas subsidiaries. Similarly, a recent claim brought against Shell seeks to link historic emissions to specific environmental damage, including the impact of extreme weather events. The claim advances arguments based on long-term corporate knowledge of climate risk and seeks compensation on a “polluter pays” basis. While the legal and evidential hurdles are significant, the case illustrates the direction in which ESG litigation is developing.
Taken together, these developments point to a clear trend. ESG claims are becoming more complex, more international, and significantly higher in value. They are moving beyond regulatory compliance and into the core of commercial litigation risk.
Practical Implications for Businesses
For clients, the key question is not whether ESG statements should be made, but how they are framed and managed. Clarity is essential. Statements should accurately reflect the organisation’s current position and distinguish clearly between present fact and future ambition. Overly broad or absolute language creates unnecessary exposure.
Internal consistency is equally important. Public statements should align with underlying data, internal reports and operational reality. Discrepancies between external messaging and internal understanding are likely to attract scrutiny if a dispute arises.
Where claims do arise, proportionality remains critical. Not every contested statement will justify extensive litigation. The court will consider the nature of the statement, the extent of reliance, and the scale of any alleged loss. Claims that are overly broad, insufficiently particularised or disproportionate risk undermining their own credibility.
Our Approach
ESG-related claims frequently arise from statements made by businesses about their own operations, supply chains and environmental impact. When issues arise, the key question is not simply whether those statements can be challenged, but whether the claim being advanced properly reflects the underlying position and is proportionate in scope and value.
More commonly, we are instructed to defend claims. In those circumstances, the focus is on the claim itself- its legal basis, the way it has been framed, and whether it seeks to impose liability in a way that is sustainable. ESG claims often involve broad allegations, attempts to attribute responsibility across complex corporate structures, or claims for loss that are not properly aligned with the alleged conduct. We are good at identifying those issues at an early stage and advancing robust, commercially focused defences.
Where claims are brought on behalf of our clients, we ensure they are tightly framed, properly particularised and proportionate to the statements in question. Where claims are brought against them, we challenge them rigorously, including where appropriate on the basis that they are overstated, insufficiently particularised or disproportionate.
The direction of travel is clear. ESG statements are no longer simply part of corporate narrative; they are capable of forming the basis of serious commercial disputes. The distinction is no longer between marketing and law, but between statements that can withstand scrutiny and those that cannot.
