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

TOP NEWS

Vinod Khosla’s new AI bet

Early OpenAI investor Vinod Khosla is betting on new AI startup Symbolica, founded by former Tesla engineer George Morgan. The ex-Tesla employee, who worked on Tesla’s self-driving systems, wants to move away from an approach to AI development that requires more and more computing power and data. “When these really smart people gravitate to an idea, it’s an important idea,” Khosla says. Fortune

A new Boeing whistleblower

The Federal Aviation Administration is investigating claims from a Boeing engineer, who alleges that the planemaker is improperly fastening fuselage sections of the Boeing 787 jet. Boeing admits it made changes to its manufacturing process, but says there is “no impact on durability or safe longevity of the airframe.” The FAA investigation is more scrutiny of Boeing’s safety record after a fuselage section of a Boeing 737 plane ripped off mid-flight. The New York Times

Apple’s shift to India

Apple made 14% of its iPhones in India last fiscal year, up from 7% the preceding year, according to sources familiar with the matter. Apple and its suppliers are devoting more resources to Indian manufacturing as they try to diversify its supply chains away from China, which still manufactures the bulk of Apple’s iPhones. The company is also targeting India as a retail market, opening its first stores in India last year. Bloomberg

AROUND THE WATERCOOLER

Shell could abandon London for a New York listing as it considers ‘all options’—and if it does, the FTSE 100 could lose its biggest player by Prarthana Prakash

Jamie Dimon says he runs JPMorgan with a military tactic in mind named the ‘OODA loop’— and it prevents the ‘greatest mistakes’ in war and business by Eleanor Pringle

All aboard the Nvidia ‘rocket ship’: Executives are raking in company stock awards despite missing out on their bonuses for 2023 by Amanda Gerut

Teachers are so fed up with the broken education system that over half wouldn’t tell a young person to do what they do by Chloe Berger

For the first time since the pandemic, Americans prefer hybrid over remote work—and it’s not the free lunches driving the shift by Sasha Rogelberg

AlphaSense, a Goldman Sachs–backed AI research startup valued at $2.5B, gears up for IPO as it crosses $200M in annual recurring revenue by Jessica Mathews

This edition of CEO Daily was curated by Nicholas Gordon.