Case - Netherlands - Milieudefensie & Others v Royal Dutch Shell PLC

Milieudefensie & Others v Royal Dutch Shell PLC

Summary of facts

Shell is a British-Dutch multinational headquartered in The Hague and is among the ten most polluting companies in the world. Shell invests the majority of its funds in oil and gas, but these reserves must remain in the ground to avert climate change. In April 2018, the Dutch NGO Milieudefensie sent a letter to Shell demanding it to align its business activities and investments with the Paris Agreement, downise its oil and gas activities and reduce its greenhouse gas emissions to zero by 2050. In response, Shell resealed a letter in May 2018 rejecting the demands. In April 2019, the claimants (NGOs alongside 17,379 co-plaintiffs) filed a lawsuit.

Timeline

2021 Hague District Court

Jurisdiction

Yes

Applicable Law

Dutch Law & International Commitments

Legal issues

The case relates to the parent company’s global operations.
Action seeking injunctive relief: request the Court to order Shell to halt its contribution to climate change through its business activities and reduce its CO2 emissions by 45% by 2030.

Ruling / Outcome

The Court distinguished between the CO2 emissions of the Shell group and the business relations of the Shell group (including suppliers and customers).
The Court considered that it is internationally endorsed (also included in the UN Guiding Principles on Business and Human Rights) that companies bear responsibilities for Scope 3 emissions (emissions that occur in the value chain different from those from the generation of purchased energy), which represent approximately 85% of Shell’s emissions.
Shell must reduce all emissions with the level of responsibility depending on its control and influence over the emissions. Reduction obligations are obligations of results for the activities of the Shell group (far-reaching control and influence of the parent company over its subsidiaries) but are obligations of “significant best-efforts” for the business relations of the Shell group.
26 May 2021: This judgement is the first time a corporation is held accountable for its contribution to climate change. The Court ruled that Shell must reduce its CO2 global emissions by 45% compared to 2019 levels, by 2030.
The Court obliged Shell to align its policies and comply with the emission targets set by the Paris Agreement based on the Intergovernmental Panel on Climate Change reports to measure the reduction obligation, and extended its responsibility to prevent human rights impacts linked to climate change beyond Shell’s own activities to its entire global value chain based on the UN Guiding Principles on Business and Human Rights.
The Court agreed with the plaintiffs that while Shell is not the only company contributing to climate change and cannot stop climate change on its own this does not absolve Shell of its individual partial responsibility.
Shell confirmed it intends to appeal the decision.