Large companies are already obliged under German law to align their business models with the 1.5-degree target of the Paris Climate Agreement. Unnoticed by large parts of the economy to date, there are already tangible climate-related obligations that force companies to act. This is the conclusion of a legal report published in July 2023 by the Hamburg law firm Günther, which was commissioned by the Sick Environmental Foundation together with the environmental organizations Germanwatch and Protect the Planet.

“It is not easy for companies to come to a clear assessment of the sometimes confusing obligations in the climate sector. But there is no question that they have to act and take responsibility. The legal report from the renowned law firm Günther provides clarity here. In view of the legal developments, companies are very well advised to adopt ambitious and science-based climate plans now and lose no more time in reducing emissions,” says Dorothea Sick-Thies, entrepreneur, member of the Supervisory Board of SICK AG and founder of the Sick Environmental Foundation.

Lawyer Dr. Roda Verheyen, co-author of the report, adds: “What has gone largely unnoticed so far are the tangible climate-related duties to act that companies already have under the existing rules in the so-called “Berichtspflichtenrecht” (reporting obligations law). Together with other legal sources, there is a whole series of partly overlapping obligations. A bundling and concretization would be desirable.”

Against this backdrop, the report refers to the upcoming EU supply chain law, which is currently negotiating criteria for corporate climate plans. In the opinion of the authors of the report, the text proposed by the EU Parliament provides clearer guidelines for companies than the drafts presented by the EU Commission and the Council of Ministers.

“The EU Supply Chain Act offers a great opportunity to create the much-needed clarity through concrete criteria for the implementation of companies’ climate obligations. This would reduce legal uncertainty for companies and at the same time take European climate policy a big step forward. However, only the wording proposed by the EU Parliament is sufficiently clear. The German government should support this,” says Christoph Bals, Political Director of the environment and development organization Germanwatch.

“The report shows that companies are already legally obliged to become active in climate protection. At the same time, politicians have the task of concretizing this obligation in such a way that legal certainty is guaranteed for companies. In this way, we can succeed in keeping climate damage within the 1.5 degree target,” adds Dr. Martin Köppel, Managing Director of the climate protection organization Protect the Planet.