Environmental lawyers Client Earth are suing all 13 directors and non-executive directors of Shell, alleging personal and corporate breach of UK company law in respect of the fossil fuel supermajor’s green policies.
The law firm says its suit is a world’s first, since it seeks to establish the personal accountability of top executives including CEO Ben van Beurden, as well as Shell’s collective responsibility as a UK-registered corporation. It alleges that Shell’s climate plan inadequately addresses the international Paris climate accords agreed in December 2015, thereby breaching obligations under the UK Companies Acts.
Shell maintains its climate strategy is consistent with the 1.5°C temperature goal of the Paris Agreement, which came into effect in November 2016. The company has set a target of 2050 to become a net zero emission energy business.
Client Earth’s suit filed this week repeats arguments successfully deployed against Shell in a case in a Dutch district court last May. Campaigners including Greenpeace made then the same allegations of inadequate risk mitigation, but in respect of Dutch law.
In a ruling subsequently appealed against by Shell, judge Larisa Alwin ordered Shell to reduce its overall emissions – including from the hydrocarbon products it sells – by a net 45% before 2031.
Shell’s directors have since spoken out against parts of the Dutch verdict, indicating that it is essentially incompatible with the firm’s continuing business model, even one altered to accommodate climate science.
Client Earth objects that Shell’s interim targets do not add up. It cites analyst research from 2021 suggesting that, far from a 45% reduction, Shell’s new strategy would result in a 4% rise in net emissions by 2030, and that the company was unlikely to meet even its own targets.
Paul Benson, Client Earth’s lead advocate in the case wrote that Shell’s “current strategy and insufficient targets put the enduring commercial success of the company and employees’ jobs at risk, and is no good for people or the planet”.
“We want to make sure the Board’s ‘wait and see’ approach to the energy transition does not come at the expense of long-term viability for the company’s stakeholders, including shareholders and employees”, Benson added.
This week’s filing of detailed arguments opens a process for Shell to respond with its counter arguments. No date for the tribunal has yet been set.
