Climate Liability Risks in Carbon-Intensive Sectors: The Holcim Case Study

The cement industry, responsible for 7–8% of global CO₂ emissions, has long been a focal point for climate liability risks. Holcim, the Swiss multinational and one of the world’s largest cement producers, now faces a dual threat: a groundbreaking legal challenge from Indonesian islanders and intensifying reputational scrutiny over its climate commitments. These pressures underscore a broader shift in how carbon-intensive industries are being held accountable for their environmental impact—and the growing risks for investors.

Legal Risks: A Precedent in Climate Litigation

In January 2023, four residents of Pari Island, Indonesia, filed a civil lawsuit against Holcim in the Cantonal Court of Zug, alleging that the company’s historical and ongoing emissions contribute to rising sea levels that threaten to submerge their island by 2050. The plaintiffs demand proportional compensation for climate-induced losses, funding for adaptation measures, and stringent emission reductions: 43% by 2030 and 69% by 2040 relative to 2019 levels [1]. The court’s decision to grant the plaintiffs free legal aid—acknowledging their case is “not devoid of chances of success”—marks a pivotal moment in climate litigation [3].

This case is significant for two reasons. First, it leverages Swiss tort law and personality rights (Articles 28 and 41 of the Swiss Civil Code) to argue that corporations have a legal duty to mitigate climate harm [5]. Second, it represents the first climate lawsuit in Switzerland brought by individuals from the Global South against a multinational corporation, setting a potential precedent for similar actions worldwide [2]. If successful, the ruling could force Holcim—and other industrial emitters—to internalize climate damages in their financial planning, increasing liability exposure and operational costs.

Reputational Risks: The Cost of Greenwashing

Holcim has responded to these pressures with ambitious decarbonization projects, including the €400 million OLYMPUS initiative in Greece, which aims to produce near-zero-emission cement by 2029, and three carbon capture projects in North America targeting 5 million tons of CO₂ sequestration annually by 2028 [4]. The company also claims to have reduced Scope 1 and 2 emissions by 24.95% per ton of cementitious materials since 2020, aligning with its science-based net-zero roadmap [1].

However, environmental groups argue that Holcim’s efforts remain insufficient. Cement production is inherently carbon-intensive, and even with carbon capture and low-emission formulations, the industry’s reliance on fossil fuels and limestone decomposition means that Holcim’s “green” innovations may not offset its historical emissions [5]. The lawsuit’s demand for a 69% reduction by 2040—far exceeding Holcim’s current targets—highlights a growing public expectation for corporations to align with the Paris Agreement’s 1.5°C pathway. Failure to meet these expectations risks reputational damage, loss of consumer trust, and regulatory backlash, particularly as governments increasingly prioritize climate accountability.

Investor Implications: Balancing Innovation and Liability

For investors, Holcim’s case illustrates the tension between industrial innovation and climate liability. While the company’s OLYMPUS project and carbon capture initiatives demonstrate a commitment to technological solutions, they also require massive capital expenditures. The OLYMPUS project alone, with its €400 million price tag, could strain Holcim’s finances, especially if regulatory or legal costs escalate [2]. Moreover, the lawsuit’s outcome could force Holcim to allocate resources to compensation and adaptation measures, diverting funds from growth opportunities.

A on the growth of climate litigation cases since 2020 would reveal a sharp increase in lawsuits targeting corporations, with 1,500+ cases filed globally by 2025. This trend suggests that Holcim’s legal risks are not isolated but part of a systemic shift in how climate damages are being adjudicated. Investors must also consider the reputational costs of perceived inaction: a 2025 survey by Swiss Church Aid found that 68% of consumers would avoid brands associated with climate inaction, a statistic that could directly impact Holcim’s market share [3].

Conclusion: A Harbinger of Systemic Change

Holcim’s legal and reputational challenges are emblematic of a broader transformation in carbon-intensive sectors. As courts increasingly recognize the right to a stable climate and stakeholders demand accountability, industrial emitters face a new era of liability. For investors, the lesson is clear: climate risk is no longer a distant threat but a present-day financial and legal reality. Holcim’s response—whether through innovation, compliance, or litigation—will shape not only its future but also the trajectory of climate accountability in global industry.

Source:
[1] Climate Action | Net Zero Climate Pledge, [https://www.holcim.com/sustainability/climate-action]
[2] Holcim Launches €400 Million OLYMPUS Project for Near-Zero Cement Carbon Emission, [https://carboncredits.com/holcim-launches-olympus-project-for-near-zero-cement-carbon-emission/]
[3] Litigating Corporate Responsibility for Climate-Related ..., [https://voelkerrechtsblog.org/litigating-corporate-responsibility-for-climate-related-loss-and-damage/]
[4] Holcim Faces Pressure To Cut Emissions Before 2025 Spinoff, [https://finimize.com/content/holcim-faces-pressure-to-cut-emissions-before-2025-spinoff]
[5] Four Indonesians file climate litigation: Holcim must take ..., [https://callforclimatejustice.org/en/four-indonesians-file-climate-litigation-holcim-must-take-responsibility/]