How the ECHR Climate Ruling Impacts Businesses and Drives Sustainability

How the ECHR Climate Ruling Impacts Businesses and Drives Sustainability

In April, the European Court of Human Rights (ECHR) ruled that over 2,000 Swiss women had successfully shown that Switzerland’s climate policies failed to protect them from climate change, violating their rights under Article 8 of the European Convention on Human Rights. Although Switzerland’s lower house rejected the ECHR ruling in June, an article in Risk Management Magazine notes that this decision sets a key legal precedent with broad implications for European governments and businesses.

As stricter climate regulations emerge, companies will face increased pressure to act on climate change. Beyond regulatory requirements, businesses must consider reputational risks, as failure to address climate issues could lead to public and legal challenges. The ECHR ruling may drive sustainable investments and impact access to capital, urging companies to reevaluate their supply chains for climate compliance.

To adapt, businesses should start by implementing emissions tracking across operations and supply chains and set clear, science-based reduction targets. Sustainability must be integrated across the organization, with all executives, not just sustainability officers, sharing climate responsibility. For instance, CFOs should assess whether investments reduce or increase carbon emissions, while CTOs can identify technological solutions for emissions reduction.

Transparency is crucial, as businesses should disclose climate risks and mitigation efforts to stakeholders. This avoids greenwashing by ensuring the accuracy and verifiability of sustainability claims. The ECHR climate ruling signals a shift in the legal landscape, and businesses aligning with emerging regulations will be better equipped to navigate the transition toward a sustainable future.