Climate lawsuits pose a financial risk to fossil fuel companies because they lower the share price of big polluters, research has found. The study, to be published on Tuesday by the LSE's Grantham Research Institute, examines how the stock market reacts to news that a new climate lawsuit has been filed or a corporation has lost its case. The researchers hope that their work will encourage lenders, financial regulators and governments to consider the impact of climate disputes when making investment decisions in a warmer future, and ultimately encourage greener corporate behavior. The study, which is currently under peer review, analyzed 108 climate-related lawsuits filed around the world between 2005 and 2021 against 98 companies listed in the US and Europe. It found that filing a new case or a court ruling against a company reduced its expected value by an average of 0.41 %. The stock market reacted most strongly in the days following the filing of lawsuits against big carbon companies, which include the world's largest energy, services and materials companies., with the relative value of these companies reduced by an average of 0.57 % after the case was filed and 1.5 % after the lawsuit was filed, an unfavorable verdict. Although modest, the researchers concluded that the decline in the value of large polluters is statistically significant and therefore related to legal issues. (Isabella Kaminski, The Guardian)