Govt More to Block Climate Change Lawsuits Against Businesses in Legal Reform

Proposed law change aims to protect investment certainty and prevent courts creating parallel climate liability system.

The New Zealand Government is moving to overhaul climate-related civil liability laws in a significant legal reform designed to prevent businesses from being sued for climate change-related damages caused by greenhouse gas emissions.

Justice Minister Paul Goldsmith announced the Government will amend the Climate Change Response Act 2002 to block tort-based legal claims against companies for alleged climate harm, arguing that ongoing litigation is creating uncertainty for businesses, investors, and the wider economy.

The proposed amendment would prevent courts from imposing liability for climate change damage or harm linked to greenhouse gas emissions in both current and future proceedings.

The move comes amid a closely watched High Court case in which an applicant has brought civil claims against six major New Zealand businesses over their contribution to greenhouse gas emissions.

Mr Goldsmith said the Government is acting to provide certainty and preserve the integrity of New Zealand's existing climate regulatory framework.

"Ongoing litigation is creating uncertainty in business confidence and investment that the Government must address," Mr Goldsmith said.

"Our response to climate change should be managed through laws passed by Parliament and national policy settings — not through piecemeal litigation in the courts."

Government Rejects Expansion of Climate Tort Liability

The reform signals a major policy stance by the Government against the expansion of climate-related tort law, which has emerged internationally as activists and advocacy groups increasingly seek to hold corporations legally accountable for emissions and climate impacts.

Under the proposed change, New Zealand courts would no longer be able to find businesses liable under tort law for climate-related harm caused by lawful greenhouse gas emissions.

The Government argues that allowing courts to create climate liability through civil litigation risks undermining the country's established emissions reduction framework and creating inconsistent legal obligations for businesses.

"The Government is acting to remove the possibility of a parallel legal regime developing outside the framework Parliament has already enacted," Mr Goldsmith said.

"It is essential to maintain the coherence of the regulatory system and deliver consistent obligations for greenhouse gas emitters."

Existing Climate Framework to Remain in Place

The Government stressed that the proposed reforms will not weaken New Zealand's formal climate commitments or remove existing obligations under the Emissions Trading Scheme (ETS).

Businesses covered by the ETS and the Climate Change Response Act will still be required to comply with emissions pricing, reporting, and reduction obligations already established through legislation.

New Zealand's climate framework includes legally binding emissions reduction targets, carbon budgeting mechanisms, and participation in the ETS, which remains the country's primary market-based tool for reducing greenhouse gas emissions.

Mr Goldsmith said these mechanisms — rather than court-driven litigation — are the appropriate way to manage climate policy.

"New Zealand already has a legal framework for responding to climate change through the Climate Change Response Act and the Emissions Trading Scheme," he said.

"The courts are not the right forum to resolve complex climate policy issues involving environmental, economic, and social considerations."

Business Sector Welcomes Greater Certainty

The Government says the reform is intended to strengthen business confidence at a time when economic growth and overseas investment remain major priorities.

Officials argue that uncertainty surrounding potential climate liability could discourage investment, increase legal risk for businesses, and create instability for sectors already operating under emissions regulations.

"Our Government is committed to fixing the basics, and certainty of law is fundamental to attracting investment, supporting business operations, and driving economic growth," Mr Goldsmith said.

Business groups internationally have increasingly expressed concern over expanding climate litigation risks, particularly as courts in several jurisdictions have begun hearing claims seeking damages or emissions reductions from corporations.

Legal analysts say New Zealand's move could position the country differently from some overseas jurisdictions where climate-related litigation is becoming more common.

Climate Litigation Increasing Worldwide

Globally, climate litigation has accelerated over the past decade, with hundreds of lawsuits filed against governments, fossil fuel companies, energy producers, and large corporations.

Cases in Europe, the United States, and Australia have tested whether courts can compel stronger climate action or hold companies financially responsible for climate-related impacts.

Supporters of climate litigation argue the courts provide an important accountability mechanism when governments or corporations fail to adequately address emissions.

Critics, however, warn that climate lawsuits risk transferring major public policy decisions from elected governments to the judiciary, potentially creating unpredictable legal and economic consequences.

The New Zealand Government has firmly aligned itself with the latter position, arguing that climate policy should remain within the democratic and legislative process.

Legal and Political Debate Expected

The proposed amendments are likely to trigger debate among environmental groups, legal experts, and industry stakeholders over the role of courts in addressing climate-related harm.

Some climate advocates are expected to argue that limiting access to civil claims weakens legal accountability mechanisms for large emitters.

However, the Government maintains that national climate policy must remain coordinated, consistent, and managed through legislation rather than fragmented court decisions.

"The law change will not alter the Government's responsibilities under the Climate Change Response Act," Mr Goldsmith said.

"Businesses with obligations under the ETS will still be required to meet them."

The reforms are expected to form part of a broader Government agenda focused on economic growth, regulatory certainty, and reducing what ministers describe as unnecessary barriers to investment and development.