ESG Litigation Guide

In Italy, the litigation landscape has seen a rise in Environmental, Social and Governance (ESG) cases, particularly in relation to greenwashing and climate change disputes. The Italian Competition Authority plays a key role in addressing greenwashing by monitoring and penalizing misleading claims that harm consumers and the market. In particular, recent case law set a precedent for unfair competition claims based on greenwashing practices, potentially leading to more business-to-business litigation. Additional risks involve contractual and tort liability actions against company directors for breaching fiduciary duties or disclosure obligations related to false ESG claims.

Regarding climate change, in recent years, non-governmental organizations (NGOs) have filed a lawsuit against the Italian State ("Giudizio Universale," 2021) and reportedly initiated another against a private company in the oil industry (2023).

Apart from greenwashing and climate change, other potential ESG-related risk factors might emerge in relation to potential violations of non-financial reporting requirements under the Italian Legislative Decree 254/2016, which implements European Directive No. 2014/95/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups as well as other upcoming sustainability reporting requirements (even if, to date, no particular litigation trend has been observed in this area).
To effectively respond to ESG-related risks (and potential rise of new disputes) in the current Italian landscape, companies shall adopt appropriate strategies to stay abreast of ESG legislation, follow authorities' recommendations, monitor developments in case law, and implement organizational measures to prevent greenwashing practices and mitigate non-compliance risks.