Environmental, Social, and Governance (ESG) considerations have entered a new era—one defined not only by voluntary commitments and disclosure standards but also by rapidly escalating legal scrutiny. Across jurisdictions, courts, regulators, investors, and civil society actors are increasingly challenging companies on their environmental and human-rights claims, fiduciary responsibilities, and supply-chain practices. The result is a global surge in ESG-related litigation that carries profound implications for corporate governance and risk management.

This article synthesizes the latest insights from leading global institutions, including the Grantham Research Institute, Sabin Center, UNEP, OECD, NGFS, and major consulting firms, to help organizations understand both the landscape of ESG litigation and the strategies needed to mitigate exposure.

1.The Rise of Lawsuits on ESG Claims, Fiduciary Duty, and Human Rights

According to the 2024 snapshot of global climate litigation published by the Grantham Research Institute and the Sabin Center, legal actions tied to ESG issues continue to expand both in volume and in the types of claims being raised. Courts are no longer addressing climate issues solely through environmental law—they are increasingly interpreting fiduciary responsibilities, consumer protection rules, and human-rights obligations through an ESG lens.

The UNEP Global Climate Litigation Report (2023) highlights that individuals, communities, and NGOs are turning to courts as a core mechanism for demanding accountability. The report also documents a rise in rights-based cases, including claims brought by youth plaintiffs, Indigenous communities, and environmental defenders seeking stronger climate action or redress for environmental harm.

At the same time, practitioner surveys summarized by BusinessGreen show that law firms anticipate continued growth in ESG disputes, especially around greenwashing, disclosure accuracy, and the responsibility of directors and asset managers to consider climate risk in their decision-making. This trend reflects intensifying investor expectations and the rising standard of care associated with ESG governance.

2.  Legal Risks in Supply Chains, Biodiversity, and Labor Practices

Beyond climate-related disputes, litigation linked to supply-chain governance, biodiversity loss, and labor rights is accelerating.

The OECD’s analysis of worker-rights risks in global supply chains shows how inadequate due diligence can expose companies to significant human-rights liabilities especially around forced labor, migrant worker protections, wage theft, and unsafe working conditions. With more countries adopting mandatory human-rights due diligence legislation, including in Europe and parts of Asia, corporations face sharper legal consequences for failing to manage downstream risks.

Meanwhile, the NGFS (Network for Greening the Financial System) highlights the rise of nature-related litigation, which challenges companies and financial institutions for failing to consider biodiversity risk. These cases increasingly argue not only environmental harm but also financial mismanagement, on the basis that ignoring nature-related risks compromises long-term value creation.

Research published by CMS and Cambridge further identifies a “new wave” of biodiversity litigation, including claims asserting violations of the rights of nature, the rights of Indigenous peoples, and breaches of emerging standards on ecosystem protection. These cases suggest that biodiversity-related claims may follow a trajectory similar to early climate litigation, expanding rapidly as courts grow more receptive.

3.  APAC Developments: South Korea, India, and Australia

The Asia-Pacific region is becoming a significant hub for ESG litigation, characterized by strong public interest actions and a more assertive role for regulators.

South Korea: Youth Climate Cases and Constitutional Accountability

South Korea is emerging as a critical jurisdiction for climate rights litigation. Documentation from Climate Case Chart and analyses from International IDEA and Human Rights Watch point to landmark cases in which youth plaintiffs challenge the government over inadequate climate action. These cases argue that insufficient mitigation efforts violate constitutional rights, including the right to life and a healthy environment, a trend aligned with growing global recognition of climate as a human-rights issue.

India: Expanding Corporate Environmental Liability

India’s National Green Tribunal (NGT) continues to play a central role in enforcing environmental standards. Legal 500’s national guidance shows that corporate defendants are increasingly held accountable for pollution, improper land use, biodiversity impacts, and non-compliance with environmental permits. With the Indian government emphasizing extended producer responsibility and climate-resilience planning, companies face heightened exposure to public interest suits and regulatory enforcement.

Australia: Greenwashing Enforcement and Active Regulators

Australia has become one of the most proactive regulators of ESG claims. The ACCC’s guidance on environmental and sustainability claims sets a strict standard for accuracy, substantiation, and transparency. Local legal analyses indicate that enforcement actions especially over misleading net-zero commitments, carbon-neutral labels, and recycled-content claims have risen sharply. This reflects a broader trend of regulators treating ESG misstatements with the same seriousness as financial misrepresentation.

4.  Governance Strategies to Reduce Legal and Reputational Risk

With litigation risks spreading across climate, nature, labor, and disclosure topics, proactive governance is now essential. Insights from Deloitte, EY, PwC, and KPMG converge on several key strategies:

Strengthening Board and Management Oversight

Deloitte’s analyses underscore the need for boards to integrate climate and nature risk into strategic planning, capital allocation, and risk management processes. Courts are increasingly examining whether directors considered material ESG risks as part of their fiduciary duties.

Improve Data Quality, Disclosure, and Assurance

EY’s 2024 Institutional Investor Survey shows that investors remain deeply concerned about misleading sustainability reporting and inconsistent emissions data. Companies are urged to adopt more rigorous internal controls, align reporting with recognized standards, and seek independent assurance especially for high-stakes climate metrics.

Manage Greenwashing Exposure

KPMG and PwC both emphasize the growing legal danger of vague, exaggerated, or poorly substantiated sustainability claims. Best practices include:

• avoiding aspirational claims without clear pathways,
• implementing strict review processes for marketing materials,
• ensuring carbon-neutral or net-zero claims are based on credible methodologies, and
• maintaining transparent documentation for all public ESG statements.

Embed Due Diligence Across the Value Chain

Given the expansion of supply-chain litigation, boards must ensure:

• human-rights due diligence processes are robust and documented,
• biodiversity impacts are assessed and managed, and
• supplier compliance is continuously monitored—not only audited once a year.

 Conclusion: ESG Litigation as a Governance Reality

ESG litigation is no longer a peripheral risk. It has become a defining feature of modern sustainability governance reshaping how companies communicate, operate, and respond to stakeholder expectations. As cases continue to rise across climate, human rights, supply chains, biodiversity, and disclosure integrity, organizations must recognize that legal accountability is now intertwined with ESG performance.

The message from global regulators, courts, and investors is consistent: ESG is shifting from voluntary commitments to enforceable obligations.

Proactive governance, transparent reporting, stronger due diligence, and credible climate-nature strategies are no longer optional, they are the foundation of effective risk management in an era of heightened accountability.