Press release

Dutch Shell ruling disappointing but legal responsibilities for high-emitting companies still firmly in the spotlight

12th November 2024

Commenting on today’s ruling in the appeal against Milieudefensie’s historic win against oil giant Shell, ClientEarth senior lawyer Paul Benson said:

“Of course the result of this judgment is disappointing. But this is unlikely to be the end of the road for the claim. And it certainly does not mean that Shell can evade its legal responsibilities for its massive climate impact.

“On the contrary, the Court was very clear: high-emitting companies like Shell have a legal obligation to reduce their emissions, and protection from dangerous climate change is a human right.

“Importantly, the Court highlighted that new oil and gas may be at odds with Shell’s legal obligations. And – crucially – the Court was definitive on Shell’s ‘Scope 3’ emissions, throwing out Shell’s argument that it is not ultimately responsible for the emissions from the products it sells.

“The Court did have difficulty in ascribing a specific percentage to Shell’s obligation to reduce its emissions. And the Court also found for Shell on the basis of – what we believe to be – a flawed premise that a company of Shell’s size and resources cannot influence customer demand for its products. We think that it clearly can and does. 

“There is no doubt that Shell’s current strategy remains commercially and legally risky. Climate change and the energy transition present seismic risks to the company and society, and doubling down on fossil fuels that cannot be burnt in a carbon-constrained world only exacerbates those risks.

“We stand by our own claim that Shell’s Board is fundamentally mismanaging these risks, to the detriment of the company and all its stakeholders.

“We’ll continue to keep a close eye on this case and, despite this setback, congratulate Milieudefensie on its efforts to hold Shell accountable.” 

ENDS

Notes to editors:

In February 2023, ClientEarth filed a groundbreaking claim against Shell’s Board of Directors for failing to move away from fossil fuels fast enough. More information can be found here.

Among other things, Dutch Court of Appeal stated the following in its ruling today:

  • 7.17: “there can be no doubt that protection from dangerous climate change is a human right.”
  • 7.27: “the court of appeal is of the opinion that companies like Shell, which contribute significantly to the climate problem and have it within their power to contribute to combating it, have an obligation to limit CO2 emissions in order to counter dangerous climate change, even if this obligation is not explicitly laid down in (public law) regulations of the countries in which the company operates. Companies like Shell thus have their own responsibility in achieving the targets of the Paris Agreement.”
  • 7.53: “obligations arising from existing regulations do not preclude a duty of care based on the social standard of care on the part of individual companies to reduce their CO2 emissions.”
  • 7.61: “It is reasonable to expect oil and gas companies to take into account the negative consequences of a further expansion of the supply of fossil fuels for the energy transition also when investing in the production of fossil fuels. Shell’s planned investments in new oil and gas fields may be at odds with this. In these proceedings, however, the court of appeal does not have to answer the question of whether Shell’s planned investments in new oil and gas fields are in violation of its social standard of care. At issue in these proceedings is whether an obligation can be imposed on Shell to reduce its scope 1, 2 and 3 emissions by 45%, 35% or 25%.”
  • 7.81: “The court has included the fact that Shell is a major player in its decision that there is a legal obligation for Shell to reduce its emissions.”
  • 7.98/99: “Shell further argues that assuming a responsibility for Shell with regard to scope 3, effectively means that it is liable for (lawful) acts of third parties (its customers). This argument does not hold water. Several of the instruments discussed above presuppose corporate responsibility for scope 3 emissions as well.”
  • 7.111: “While it follows from the foregoing that Shell may have obligations to reduce its scope 3 emissions, this cannot lead to the award of Milieudefensie et al.’s claims on this point. The court of appeal has come to the conclusion that Shell cannot be bound by a 45% reduction standard (or any other percentage) agreed by climate science because this percentage does not apply to every country and every business sector individually.”
About ClientEarth

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.