Two Polish utilities companies have been told they cannot build a coal-fired power plant after lobbying group Client Earth won a fierce legal battle.
Client Earth, a non-governmental campaign organisation on sustainability issues, has been fighting the case against planned coal-fired plant “Ostrołęka C” after investors protested against utilities groups Energa and Enea.
On Thursday (1 August), Client Earth confirmed that a district court in Poznań, Poland, had ruled the construction of the power plant to be “legally invalid”. The backers of the plant are entitled to appeal.
Over the past year, major investment groups including Legal & General Investment Management, had been calling on the company to cease with its plans to build the plant, filing protests through its engagement channels.
In October, the fund group’s head of sustainability and responsible investment strategy at LGIM, Meryam Omi, told Reuters that they had “serious concerns” about the plant.
She explained that LGIM was compelled to invest in the company’s building the plant – Energa and Enea – because it is an index manager, but went on to warn that investors would be exposed to unnecessary risks if the plant went ahead.
“Our clients are exposed to very high financial risks due its uncertain policy support, rising carbon prices, unreliable capacity payments and threat of new technologies in energy generation.”
On Thursday, Peter Barnett, a lawyer for Client Earth said that the court ruling is a good result for investors and said it should send a message to other companies considering fossil fuel activities.
“The plant is a stranded asset in the making, facing clear and well-documented financial risks,” he said.
“Companies and their directors are legally responsible for managing climate-related risks and face potential liability if they fail to do so. Enea and Energa should lay this project to rest before it incurs any further costs to the companies and their shareholders.”