Climate litigation in Australia: Key developments in 2025 and what's ahead for 2026

What you need to know

• Litigation seeking to establish a novel climate change duty of care in Australia faced further obstacles in 2025, but will continue to be pursued.
• Australian businesses will continue to face greenwashing litigation brought by activist groups and regulators, and should also prepare for other avenues of climate litigation.
• Projects with significant GHG footprints will continue to face judicial review proceedings relating to project approvals.
• 2026 will see the first mandatory climate related disclosure reports being published which will be closely scrutinised by regulators and community stakeholders.
• There are numerous events and influences playing out globally in 2026 that are likely to influence and expand climate and ESG litigation in Australia.

What you need to do

• Monitor key developments in the climate change landscape, acknowledging both legal changes and broader social discourses are likely to influence domestic litigation.
• Carefully review project assessment and mandatory disclosure documentation to minimise risk of successful legal challenges and regulatory action.
• Consider the risk of climate litigation holistically in light of relevant obligations, as litigation is being brought against new entity types and we are also likely to see more diverse causes of actions being relied upon.

In this publication, we look at the major developments in climate litigation in 2025 and what's on the horizon for 2026

2025 was a significant year for climate litigation both in Australia and abroad. A number of developments in 2025 show there is likely to be a continued trend of litigation brought by activists against both governments and businesses in 2026 as a means to seek accountability and drive faster change, particularly in light of the geopolitical trend of governments and political parties moving away from net-zero commitments.

ICJ's landmark 2025 advisory opinion on states' obligations regarding climate change will stimulate climate litigation

A significant milestone for climate litigation globally was the advisory opinion delivered in July 2025 by the International Court of Justice (ICJ), in which the ICJ concluded that states have wide-ranging obligations to prevent the "existential problem" of climate change, and can be held responsible for climate harm. See our previous summary on this advisory opinion here and our webinar on what this may mean for climate litigation here.

While non-binding, the ICJ's findings will encourage and influence climate litigation, both in public law challenges to government decisions that relate to GHG emissions, and in cases brought under various causes of action against private entities in relation to their emission-generating activities.

Duty of care based climate litigation in Australia faced further obstacles in 2025, but will continue to be contested in 2026

The landmark Australian case of 2025 was the Federal Court's decision in Pabai v Commonwealth that the Commonwealth Government did not owe a duty of care to the people of the Torres Strait Islands to protect them from the impacts of climate change. This decision presents a further obstacle to the duty of care/human rights based approach to climate litigation in Australia following the previous Full Federal Court decision in Sharma. You can read our analysis of the Pabai decision here.

Duty of care based climate litigation remains alive in 2026, with the stage set for the Federal Court's decision to be revisited with an appeal filed with the Full Federal Court in November 2025. This appeal should be watched closely by both governments and businesses in Australia, particularly as it seems likely the ICJ's advisory opinion (which was published after the Pabai decision was handed down by the Federal Court) will be relied upon in support of the Applicant's appeal. If this is the case, the Full Federal Court's approach to the ICJ's findings and the application of these to Australian law may be a significant influence in the likelihood of further duty of care based climate litigation being brought in Australia.

Additionally, in 2026, a Federal Court hearing is scheduled for July concerning challenges to the Federal Government's decisions regarding the extension of the operation period of the North West Shelf gas field project in Western Australia. One basis of challenge is that climate change risks should have been considered under the Environmental Protection and Biodiversity Conservation Act (1999) (EPBC Act). This litigation is significant due to the fact that in November 2025 the United Nations Special Rapporteur on the human right to a clean, healthy and sustainable environment applied to participate as an amicus curiae or "friend of the court'. In doing so, the UN representative seeks to present arguments on Australia's international legal obligations in relation to the environment and the application of such obligations to the Court's interpretation of the EPBC Act. The UN representative's application will be decided prior to the final hearing in July 2026. If the Special Rapporteur is granted leave by the Federal Court to participate, it will be a significant development for a UN appointed adviser to be involved in domestic Australian litigation, and any endorsement of the Special Rapporteur's arguments by the Federal Court could encourage further duty of care based climate litigation.

Australian businesses will continue to face greenwashing litigation, and should also prepare for other avenues of climate litigation

In 2025, Australia continued to see significant greenwashing litigation being brought against businesses, in part due to its expansive misleading or deceptive conduct laws. In activist litigation developments, a first of its kind greenwashing proceeding against a major Australian energy company marketing a consumer product as carbon neutral was settled shortly before commencement of trial. The Federal Court also handed down its decision on 17 February 2026 regarding the activist litigation heard in late 2024 against major Australian energy company Santos, finding that the allegations of misleading or deceptive representations about net zero pathway statements were not made out, with written reasons to be made publicly available next week. It is expected that this decision will be closely reviewed by activist litigation groups contemplating future greenwashing proceedings, and could provide key insights regarding how Australian courts will assess whether a company has a reasonable basis for forward looking climate statements.

Regulatory action against greenwashing was also prevalent in 2025, and this enforcement activity will likely continue into 2026. The Australian Competition & Consumer Commission (ACCC) has brought enforcement proceedings to deter greenwashing by Australian businesses, notably with the Federal Court imposing a civil penalty of $8.25 million for representations to consumers that kitchen and garbage bags were made using "ocean plastic" when in fact the plastic was sourced a considerable distance from the ocean. In 2025, the ACCC also commenced greenwashing proceedings in relation to the marketing of sunscreen products as "reef friendly", and representations by a gas company as to the future renewable status of gas in Australia. With greenwashing remaining an enforcement priority for the ACCC in 2026, it can be expected the ACCC will continue to investigate and commence proceedings against businesses across multiple industries in this area.

In the regulation of financial products and services, 2025 saw the Australian Securities and Investments Commission (ASIC) continue to build on its first and second greenwashing civil penalty orders obtained in 2024 (see our previous updates on these penalties here and here), with 2025 seeing the Federal Court ordering a penalty of $10.5 million in relation to ASIC's third greenwashing penalty proceeding against a superfund for investing in areas such as coal mining, that it had represented to members were eliminated or restricted from investment under ESG policies. You can read more about the earlier liability decision of the Federal Court that led to this penalty here. Although ASIC has stated greenwashing will not expressly be an enforcement priority in 2026, this should not be taken by businesses in Australia as an indication ASIC is moving away from climate related enforcement action entirely. For example, in October 2025, ASIC commenced a new greenwashing civil penalty proceeding against the responsible entity of a managed investment scheme on the basis of alleged inconsistencies between its actual investment activities and what was represented about this fund in a product disclosure statement about alignment with ESG outcomes. This action by ASIC is noteworthy as it is the first time a responsible entity has been targeted by ASIC in its greenwashing penalty actions, where it has relied upon the duties and obligations of responsible entities under the Corporations Act (2001) (Cth) as additional causes of action to seek redress for alleged greenwashing.

The approach of ASIC in going beyond the "tried and tested" cause of action of misleading or deceptive conduct for greenwashing is a timely reminder that Australian businesses should continue to assess the risk of climate litigation and/or regulatory action holistically in light of their relevant legal obligations. Areas of uplift that may be considered low risk should be re-assessed if these actions have a nexus to a product or service that is marketed by your business as aligned with positive ESG outcomes.

Major projects: environmental and native title-based challenges to project approvals

There are a number of active proceedings running into 2026 which will consider how climate impacts attributable to major projects are to be assessed in the decision making process. First, we expect to see the High Court's determination of MACH Energy's appeal of the NSW Court of Appeal's decision regarding planning approval for the Mount Pleasant project extension, with MACH contending that the NSW Court of Appeal erred in its findings about whether there is a requirement to take into account climate change impacts in the locality under the planning legislation.

Second, the Full Federal Court will hear the appeal brought by the Gomeroi People (the Native Title Party) in relation to the National Native Title Tribunal's determination in May 2025 that the grant of the PPLs required for Santos' Narrabri Gas Project may be done, subject to conditions (see our previous update on the May 2025 tribunal decision here). The Native Title Party has raised numerous grounds of appeal, including grounds concerning the proper construction of the Native Title Act 1993 (Cth) and the Tribunal's approach to its consideration of the mandatory s 39(1) factors, grounds relating to the Tribunal's alleged failure to consider relevant matters or improper regard to irrelevant matters (eg fugitive emissions), and grounds relating to procedural fairness, particularly in respect of the previous interlocutory decisions of the Tribunal.

Third, as discussed above, a Federal Court hearing is scheduled for July 2026 concerning challenges to the Federal Government's decisions under the EPBC Act regarding the extension of the operation period of the North West Shelf gas field project in Western Australia.

Fourth, whilst the EPBC Act reforms introduced in the latter half of 2025 did not result in a GHG trigger, the amendments require proponents to submit details of scope 1 and scope 2 GHG emissions as part of the referral and application process.

The outcome of these proceedings will continue to develop how courts and decision makers consider and assess climate expert evidence.

Mandatory Climate Related Financial Disclosure Reports

The first mandatory climate change related disclosure reports will be published by corporations during the course of 2026. The scheme is a significant regulatory development, enhancing the transparency and comparability of climate-related financial information by aligning Australia's requirements with those of the International Sustainability Standards Board . The framework distinguishes between mandatory disclosure content, which includes governance arrangements, climate-related risks and opportunities, and greenhouse gas emissions metrics, and voluntary disclosure content, where entities may elect to provide additional information beyond the prescribed requirements.

The regime incorporates modified liability provisions intended to facilitate the transition to mandatory reporting. These provisions afford reporting entities certain protections in respect of forward-looking statements, including those relating to Scope 3 emissions, transition plans, and scenario analysis, during an initial transitional period. Notwithstanding these liability modifications and the phased introduction of assurance requirements over the first three years, the inaugural reports are expected to attract close scrutiny from regulators, investors, and the broader community. This scrutiny is likely to prompt both public discourse on corporate climate performance and, where deficiencies are identified, may further influence climate litigation activity.

Other developments that may influence climate litigation in 2026 and beyond

Australian climate litigation in 2026 and beyond will likely be influenced by numerous factors playing out globally. Some notable examples include:

• UN Climate Change Conference (COP) 31. Australia will be responsible as "President of Negotiations" at COP 31, being responsible for negotiations and consultations up to and during the conference. It is likely this role will heighten attention on Australia's climate change actions both from government and business, and any comments made as to forward looking commitments in this regard will be carefully monitored and scrutinised in relation to planned or potential domestic climate litigation.
• English High Court liability decision in Mariana v BHP. In a landmark decision handed down in November 2025, a mass tort class action in the English High Court that involves over 600,000 claimants ruled that BHP (which at the time of the collapse was dual listed on both the UK and Australian stock exchanges) was liable for the collapse of the Fundão dam in Brazil, notwithstanding that BHP was not the direct legal owner of the entity responsible for the dam in Brazil. See our previous discussion of this decision here. While this decision does not create a precedent binding on Australian courts, the implications of a multinational company being found liable for environmental damage for the actions overseas of a subsidiary is likely to garner significant interest in the potential to bring claims against Australian domiciled/listed companies in relation to environmental issues in other jurisdictions.
• Political movements away from climate commitments may encourage further activist based litigation. As we enter 2026, we have seen political trends of a movement away from previous climate change action commitments both domestically and internally, including the Australian Liberal and National Parties formally abandoning net-zero commitments. Governments and businesses should be aware of the potential for further climate litigation brought by activist groups as a result of these trends, as litigation may be perceived as a more viable or effective avenue to seek accountability or drive change.

Broader ESG litigation is likely to continue to expand

There are more areas of litigation falling under the "E" of ESG litigation that will likely see developments in 2026. For example, litigation based on alleged breaches of state environmental laws, or for alleged breaches of the EPBC Act, is likely to continue and expand. The reformed EPBC Act and introduction of a national EPA body are likely to result in further litigation. See our previous discussion of these reforms here.

Similarly, there are many areas in ESG litigation beyond environmental litigation that will be in the spotlight for 2026. These include obligations of employers to employees, including safe work practices, and a heightened focus on governance and risk cultures in Australian businesses in areas such as the financial accountability regime and potential reforms to the Modern Slavery Act 2018 (Cth). The recently announced royal commission into antisemitism and social cohesion will result in greater attention on racial and religious discrimination, as well as the question of social cohesion obligations on governments and businesses in 2026.

We expect these areas (and more) to be the subject of litigation risks that will see ESG litigation continue to expand, and these cases will likely adopt similar arguments to those seen in climate litigation, such as misleading or deceptive conduct and novel duty of care cases.

Other authors: Oscar Doupe-Watt, Associate, Patrick Stratmann, Associate and Alice Jiang, Lawyer.