Europe’s landmark climate change ruling may force companies to reduce ’emissions as quickly as you can’

On Tuesday, the European Court of Human Rights (ECtHR) ruled that Switzerland had “failed to comply with its duties…concerning climate change” in a case brought by a group of senior women. The judgment applies to Switzerland and 45 other countries where the court has jurisdiction, including all EU members and the U.K., and carries consequences for most Fortune Global 500 companies. 

The claimants had argued for almost a decade that they suffered more than most from global warming, and that their government was obliged to protect them, considering their right to a healthy life. Swiss courts dismissed the women’s claims, but the ECtHR—Europe’s highest court for human rights—ruled in their favor by a vote of 16 to 1. 

What does the ruling mean for Switzerland and global business? I asked lawyer Cordelia Baer, who represented the women, hours after the ruling. 

Switzerland “will have to remedy the violation,” she said. “The first step would be to make a CO2 budget based on the best available science.” The court cited “critical gaps” in Switzerland’s existing framework. Ultimately, the decision may force Switzerland to become carbon-neutral in the next 10 or 15 years instead of by 2050, its current goal (that it’s not on track to meet).  

The decision likely leaves Swiss Fortune Global 500 companies, including Glencore, Swiss Re, and Zurich Insurance, with “small carbon budgets” to work with as they seek net zero, Baer says. She suggests they “reduce as much emissions as quickly as you can, because there is no way around it. When the cake is gone, it’s gone.” 

Other Fortune Global 500 companies, especially those with significant operations or headquarters in Europe, will likely feel the ECtHR’s judgment down the line. Experts say Tuesday’s decision aligns with past climate rulings in national courts, such as a Dutch court’s 2021 order that Shell dramatically cut its greenhouse gas emissions, and therefore further emboldens claimants to go after corporate polluters.

The ECtHR’s decision is now “a leading case,” Baer said. “So it will be adopted in other member states if claimants elsewhere have their human rights violated.”

Peter Vanham
peter.vanham@fortune.com
@petervanham

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This edition of CEO Daily was curated by Nicholas Gordon.