For the past decade, analysts have debated how much of a threat the clean energy transition poses to the oil and gas industry. The longer it takes to move to a clean economy, the better positioned those companies will be. But a new trend is emerging as a significant X-factor for the industry’s financial wellbeing: the growing effort to attribute climate damages to individual companies.
A new study this week published in the journal Nature underscores this trend with an analysis of more than 200 heat waves that occurred since 2000. Researchers found that climate change made the heat waves more intense—and links those heat waves to what they call the 180 biggest carbon majors, essentially high-emitting companies, from coal to cement producers. If that claim were to be accepted in a court, those firms could be liable for the costs of those heat waves. “Although this work aims at filling in scientific gaps,” says the paper, “the results also fill in evidentiary gaps.”
The research comes amid a flurry of lawsuits that seek to make energy companies pay for the costs of climate change. In the last decade, more than 80 cases have been filed around the world that seek to force polluting companies to pay the cost of climate damages, according to a report from Grantham Institute at the London School of Economics. Eleven of those cases were filed last year alone. (My colleague Simmone Shah wrote about one such lawsuit last month.)
Lawsuits can sometimes serve just as messaging vehicles—meant to shape public opinion even if they have a slim chance of actually winning in the courtroom. But, taken collectively, lawsuits targeting companies have the potential to actually shape the law. A court in Germany ruled earlier this year that companies can be held liable for the climate damages caused by their business. In the U.S., suits in Hawaii, Minnesota, and Colorado have achieved big procedural wins. And, while the lawsuits rely on unresolved legal questions—from whether companies should be held accountable as purveyors of the product to how to apportion blame for any one climate event to any given company—the energy industry is taking them seriously. While industry officials avoid the topic in public conversations, behind the scenes they acknowledge that ligation is a significant risk to the future of their business. No matter how you crunch it, paying the cost of climate-linked events could easily eviscerate the balance sheet of even the largest firms.
Financial disclosures offer a glimpse into how fossil fuel companies view the lawsuits. In a filing last year, Chevron described the suits as “legally and factually meritless” but acknowledged that “given the uncertainty of litigation there can be no assurance that the cases will not have a material adverse effect on the company’s results.” ConocoPhillips described them similarly in its 2024 annual report, calling them an “inappropriate vehicle to address the challenges associated with climate change” while saying “the ultimate outcome and impact to us cannot be predicted with certainty.” You can find similar statements from a wide range of companies.
It would be foolish to try to predict how all of this will shake out. In the U.S., the Trump Administration has sued to block such lawsuits from states seeking damages from energy companies for climate losses. And it’s easy to imagine federal appeals courts siding with industry on such an untested theory. But these cases are global—much like energy companies. And all it takes is one eager jurisdiction to significantly change the landscape.
Success in these lawsuits would be a cause for celebration for many in the climate movement who hope to hobble the industry. At the same time, others seeking to push the industry to use its balance sheet to invest in clean technologies might need to pivot if climate lawsuits diminish the financial position of fossil fuel companies. For many in between, the lawsuits introduce weighty questions about accountability—corporate and otherwise. But, regardless of where you stand on the ideological landscape, the fate and direction of oil and gas companies is a central question for efforts to tackle climate change. With that in mind, it’s worth taking these cases seriously.
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