The New Frontier of Corporate Climate Litigation: The MPF v. Shell Case and the Floods in RS
Public Civil Action filed by the MPF and Instituto Preservar marks a new moment for the climate litigation scenario against private companies and corporations in Brazil.
Dear readers,
The climate litigation landscape is undergoing a tectonic shift in Brazil and around the world. Historically, lawsuits on this matter focused on compelling States and public entities to comply with decarbonization targets. Now, Brazil and the world are definitively entering the era of corporate climate litigation, aimed at directly holding accountable not only banks, investment and pension funds, insurance companies, and other economic actors, but also—and above all—major emitting companies (Carbon Majors) for damages caused by extreme weather events.
Corporate Climate Litigation on the Rise
Globally, courts are beginning to accept that major fossil fuel corporations be sued for their share of responsibility in climate change, both in terms of civil liability and regarding governance structures, risk controls, and climate change impacts.
Landmark cases in Europe (such as Lliuya v. RWE in Germany and Milieudefensie v. Royal Dutch Shell in the Netherlands) have set relevant precedents for the discussion on how companies neglect the energy transition and the management of climate risks and impacts. The net is tightening based on the principles of international and national environmental and climate law tied to the polluter-pays principle, as well as recent judicial interpretations—such as those by the Inter-American Court of Human Rights (IACHR) and the International Court of Justice (ICJ)—which reinforce the human right to a stable climate and the duty of due diligence of Sovereign States and, consequently, of private actors regarding existing climate-related obligations.
Landing in Brazil: The Structure of the MPF and Instituto Preservar v. Shell Case
On October 9th, 2026, the Federal Public Prosecutor’s Office (MPF) and Instituto Preservar filed a climate Public Civil Action (ACP) that is already historic in nature—regardless of the paths the Judiciary will take—against Shell Brasil Petróleo. The objective is proportional compensation for the damages caused by the catastrophic floods that devastated Rio Grande do Sul between April and May 2024.
The lawsuit seeks to order the company to pay more than R$ 270 million in material damages and another R$ 270 million for collective environmental and climate moral damages. If granted, the amounts will be directed to a specific financial mechanism for reparation, climate adaptation, and reconstruction in Rio Grande do Sul.
The legal focus of the initial pleading moves away from common assumptions. The lawsuit does not attribute exclusive responsibility for the tragedy to Shell, but rather seeks proportional liability relative to its historical contribution to global warming, aggravated by historical Greenhouse Gas (GHG) emissions, particularly in fossil fuel sectors.
To support this thesis, the ACP relies on three fundamental pillars:
1. Attribution Science as a Link of Legal Causality The greatest legal challenge, in this and in most similar climate litigation cases, has always been proving the causal link (factual evidentiary connection) between the pollution (the act or omission generating damage) of a specific company and a localized climate event (the damage or harmful effect). This is where "Attribution Science" comes in. The ACP petition uses peer-reviewed scientific studies that cross three lines of analysis:
Warming Attribution: Proves that human GHG emissions have raised global/planetary temperatures in recent years;
Source Attribution: Using the Carbon Majors initiative database, which demonstrates that the Shell Group is historically responsible for approximately 2.02% of cumulative global GHG emissions from fossil fuels and cement;
Extreme Event Attribution: Based on a study published in the journal npj Natural Hazards, it demonstrates that human-induced global warming made the rainfall event in Rio Grande do Sul approximately twice as likely and about 12% more intense in terms of effects and impacts.
2. Dismissing the "Drop in the Ocean" Thesis A common corporate defense in climate litigation against private companies is to claim that a single company's GHG emissions represent a minimal global fraction (a "drop in the ocean") and are therefore legally irrelevant. The ACP attacks this thesis by arguing that environmental-climate civil liability in Brazil is governed by joint and strict liability rules, ruled by the strict risk theory (teoria do risco integral—without the discussion of fault or intent, and without the application of defenses/exclusions). A 2.02% contribution, within a universe of thousands of emitters, is significant and technically measurable to justify liability, obviously requiring the regular evidentiary and technical discussion phase within the proceedings.
3. Legality of Business Activity Does Not Waive the Duty to Repair Another critical warning for the market and private companies in carbon-intensive sectors: the MPF maintains that the fact that petroleum exploration is legal and licensed by the State does not eliminate the duty to indemnify. Under the strict environmental (and climate) liability regime, an environmental license is not a safe conduct against liability for climate damages generated by the business value chain.
Here, it is necessary to highlight the economic order of the 1988 Federal Constitution (art. 170, caput, items III and VI), which establishes both the social function of property and the preservation of the environment as binding target norms, leaving no constitutionally or legally legitimate room for private economic activity without considering environmental and climate limits. This is a framework integrated into the entire Brazilian legal order (such as Law No. 6,404/1976—the Corporations Act—art. 116, sole paragraph, and arts. 153 and 154—institutional duties of care, diligence, and the social function of corporate control).
Next Steps: The Initial Order and Judiciary Specialization
The judicialization of climate risk is already moving the structures of the State itself. A crucial detail that cannot pass unnoticed by professionals working in climate change and sustainability is the venue where this action is pending: the newly created Processing Center for Lawsuits Associated with the RS Climate Catastrophe – 2024 (CEPLACC24), within the Federal Justice of Rio Grande do Sul. The Brazilian Judiciary has already realized that it will need specialized structures to handle the volume and technical complexity of climate liabilities.
In her first decision, the judge responsible for reviewing the case, in addition to ordering the summons of the defendant company—reinforcing the importance of due process and full defense—notified the Office of the Attorney General of the Union (AGU) to state whether the Federal Government has an interest in joining the lawsuit. Considering the billions of reais from public funds mobilized to assist the state of Rio Grande do Sul, the Union's entry into the lawsuit could transform this case into one of the largest legal-climate battles in the corporate climate litigation landscape in Brazil and worldwide.
Outlook for Corporate Climate Litigation
What does this case reveal to us? That the cost of climate liabilities and inaction in the face of the climate emergency is already knocking on the door of private operations, especially in fossil fuel-related sectors. Major polluters (direct or indirect) contributing to climate change are—and increasingly will be—in the sights of litigation in courts in Brazil and around the world.
For boards of directors, executive management, corporate sustainability, and compliance professionals, the message is clear: recent updates and advances in requirements by Brazilian regulators, such as BACEN, PREVIC, and SUSEP regarding climate risk disclosure, are only the first step in this shift. The lack of concrete action toward real mitigation of these risks and a transition to a decarbonized economy may result in severe judicialization, multi-billion-reais fines, and proportional liability based on the best available climate science.
How does your company evaluate its own historical carbon footprint and the climate impacts of its value and production chain? Furthermore, what is the role of companies and corporate duty in the face of the climate emergency? Climate litigation risk has definitively ceased to be a theory and has become a reality in Brazil.
Until the next edition!
Author: Bruno Teixeira Peixoto
Automatically translated text. Article originally posted on LinkedIn.
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