Press release
Whitehaven court decision confirms serious stranded asset risk for investors
13 September 2024
In reaction to today’s High Court ruling quashing the approval of the Whitehaven coal mine as a result of the case taken by Friends of the Earth and South Lakes Action on Climate Change, ClientEarth lawyer Megan Clay said:
“In 2022, ClientEarth wrote to Whitehaven coal mine’s financier and stressed it risked breaching its legal duties by backing a soon-to-be stranded asset – and that warning of asset-stranding has come to pass in today’s landmark judgment.
“We told the fund – EMR Capital – that even if the mine were to proceed, demand for coking steel would die out in the UK and the EU as the energy transition unfolded.
“We believed that continuing to finance the project would breach its legal obligations to its investors and would clearly contradict the fund’s public commitments to responsible investment standards. [1]
“By investing in Whitehaven, EMR Capital exposed its investors to a wholly foreseeable risk. I hope they are able to explain to investors how this investment was compatible with their best interests and the fund’s own policies and commitments.
“With today’s ruling, investment funds the world over now have a clear signal from our courts on the risks of investing in coal expansion – and they must address their portfolio exposure to these projects to manage those risks.
“Beyond coal, this judgment highlights the serious risks facing investors that are considering backing new fossil fuel projects in the UK. It follows and builds on the landmark Supreme Court judgment earlier this year that found authorities must take account of downstream emissions when it comes to planning decisions.” [2]
Under West Cumbria Mining’s proposals, up to 2.78 million tonnes of coal would have been produced for the steel industry per year until the mine was scheduled to close in 2049, despite the global need to urgently phase out coal to avoid climate catastrophe. [3]
ENDS
Notes to editors:
[1] Through a controlling interest in the West Cumbria Mining group, the mine is owned by a Cayman Islands private equity fund managed by EMR Capital. ClientEarth’s full letter to EMR Capital mentioned above is available at: 2022-07-26-clientearth-letter-to-emr-capital-pdf.pdf and our release is available at: ClientEarth alerts Cumbria coal mine financier to legal risk | ClientEarth
[2] In June, the Supreme Court ruled that authorities must consider downstream greenhouse gas emissions when weighing planning approval, in a case fighting the construction of a new oil well in Surrey. ClientEarth’s full reaction to the judgment is available at: https://www.clientearth.org/latest/press-office/press/uk-supreme-court-has-changed-the-game-on-climate-decisions-clientearth/
[3] The Whitehaven Coalmine legal briefing: July 2024 briefing from Friends of the Earth is available at: https://friendsoftheearth.uk/climate/whitehaven-coal-mine-july-2024-legal-briefing
About ClientEarth
ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.