A landmark ruling in Germany that declares climate protection is a basic human right could spell serious trouble for Volkswagen, Europe’s largest carmaker.
As the world’s attention turns to Glasgow and the COP26 conference, Greenpeace plans to file a lawsuit against VW in district court in Braunschweig that would require the auto giant to dramatically curtail the global sale of combustion engine cars in the coming years, and end all sales of the polluting variety entirely by the end of the decade.
The landmark suit would come after a constitutional court decision in March found the German government had broken national law by taking insufficient action to meet Paris climate accord targets. That provided the climate activists the legal ammunition to go after such a giant target as Volkswagen. Greenpeace aims to prove corporations have just as much of an obligation as states to limit global warming to 1.5 degrees. For good measure, Greenpeace is also urging EU lawmakers in Brussels to ban short-haul flights.
“I feel very good about our chances to win,” Marion Tiemann from Greenpeace Germany told Fortune, adding that the Volkswagen suit may be just the start of the organization’s legal crusade. “This would send a signal it’s not just environmental advocacy groups demanding change, it’s the justice system itself.”
Tiemann believes another recent precedent supports the case against Volkswagen, after judges mandated Royal Dutch Shell reduce its greenhouse gas emissions. Volkswagen, for its part, acknowledges it, too, is a major emitter, responsible for 1% of all global CO2 emissions, and was the very first automaker to commit itself to the Paris accords back in 2018.
“The Shell ruling demonstrated that companies can no longer hide behind the consumer, but rather have an intrinsic legal responsibility not to harm individuals,” the Greenpeace activist said.
In a statement to Fortune, Volkswagen defended its decision to continue selling combustion engine cars. While the company said it was doing its part for the climate by becoming carbon neutral in 2050 at the latest, it argued that the duty to tackle climate change ultimately lay not with the courts, but the legislative branch of government.
“Civil claims against individual companies are neither the appropriate means nor forum for addressing this important matter,” it said in the statement.
We could countersue you
Auto executives argue the Shell ruling is indeed problematic, since a company can be sued for the consequences of going about its business legally.
“By that same logic we could just as easily countersue with the argument that activists drive and fly as part of their advocacy work as well, and in doing so threaten our health and well-being as a result, too,” said an industry source. “In the end, everyone will be able to sue anyone.”
The lawsuit highlights the core dilemma all European companies are facing as stakeholders increasingly hold them to account for climate degradation: At what speed can they future-proof their business for a net-zero world without losing their customers or laying off thousands, leaving families and communities in the lurch?
Just this week, Volkswagen boss Herbert Diess warned the transformation to take on Tesla would cost jobs at its core Wolfsburg plant.
Greenpeace is meanwhile looking to reestablish itself as a force to be reckoned with, after Greta Thunberg’s Fridays for Future youth movement garnered greater awareness for climate change since its inception in 2019. More radical climate movements like Extinction Rebellion and now Insulate Britain are also stealing Greenpeace’s thunder with guerrilla-style tactics aimed at bringing daily life to a halt in the hopes of enacting change.
Climate hawks attack
The most media coverage Greenpeace lately received was for a botched effort to land a motor propelled paraglider in the Munich stadium, where the Volkswagen-sponsored German national team launched its European championship. Fearing another terrorist threat after the November 2015 attempt in Paris, sharpshooters nearly shot the activist dead after he flew at high speed into the stands, injuring two. Criticism of the “wholly irresponsible” act rained down on Greenpeace.
VW Group isn’t the only one targeted for a lawsuit, either. Environmental Action Germany, a partner of Greenpeace, already filed a lawsuit last month against BMW and Mercedes, as well as oil and gas explorer Wintershall Dea.
Germany’s auto industry has for years earned fat profits from selling luxury limousines, high-performance sports cars, and oversize SUVs often running on six- and eight-cylinder combustion engines. In the past, it has lobbied hard to minimize emissions regulations, with Chancellor Angela Merkel intervening personally during an EU summit meeting a decade ago on behalf of her industry to prevent more punitive legislation.
Yet Volkswagen, Mercedes-Benz, and BMW are now in a competitive race with EV startups like Tesla, Nio, and Lucid that appeal to an entirely different, younger customer demographic no longer in awe of their fabled German engineering precision.
Combined with ever more draconian tailpipe regulations that effectively mandate a switch to zero-emission vehicles, the German auto industry is investing €70 billion in electric vehicles over the five-year period through 2025, according to figures from its own domestic lobby.
Volkswagen Group and Daimler even seem to be thankful for the policy, since it means they no longer have to worry about spending to develop two parallel drivetrains for all their models simultaneously, but rather can concentrate solely on battery-powered cars.
Mercedes, for example, has said it is shifting from a strategy of “electric first” to “electric only” and aims to be ready to switch to battery-powered vehicles solely by 2030—at least for those markets where favorable EV regulations and an extensive network of chargers make it feasible.
“That’s why we’re relatively relaxed about the lawsuit,” a source at the premium brand told Fortune.
It may seem odd then to target German auto industry giants now, just as they are finally cleaning up their act. But Tiemann argues good intentions are irrelevant. There’s one immutable fact: Once the remaining carbon budget is exhausted, there is no way to limit global warming to 1.5 degrees.
“Far more important than what new EVs they plan to launch is when they will stop selling combustion engine cars,” said Tiemann. “Physics counts what their new cars built today will emit for the next 15 years, and doesn’t care whether these companies are making a greater effort.”
Update, Oct. 29, 2021: This post has been updated to include a statement from Volkswagen.
Subscribe to Fortune Daily to get essential business stories delivered straight to your inbox each morning.
