Milieudefensie wins groundbreaking lawsuit from Shell over CO₂ emissions

December 5, 2020 by No Comments

Oil and gas company Shell must reduce its greenhouse gas emissions faster than it had planned. The court in The Hague determined this on Wednesday afternoon in a much-discussed lawsuit that was filed by, among others, the environmental organization Milieudefensie and more than 17,000 individual claimants. Shell must have reduced its CO₂ emissions by a net 45 percent by 2030 compared to 2019, the court orders. According to the court, Shell also has a ‘weighty best efforts obligation’ towards its suppliers and customers when it comes to CO₂ reduction. The ruling could also lead to other international oil companies being forced through the courts to do more to prevent environmental damage.

For the second time, a Dutch judge has provided a ruling in a climate case that can also have major international repercussions. This happened earlier in the Urgenda case in 2015 (which was finally decided in Urgenda’s favor in cassation by the Supreme Court at the end of 2019). In that case, the state was ordered to reduce its greenhouse gas emissions.

This time it is a private party. The uniqueness of this case is that Milieudefensie is requesting an adjustment of the policy of the listed Shell, in order to comply with the requirements of the Paris Climate Agreement. Previous climate cases against oil and gas companies – there have now been dozens worldwide, in which Shell was sometimes also sued – usually involved responsibility for damage as a result of climate change.

In this case, Milieudefensie is looking to the future. Without the participation of companies such as Shell, it is impossible to achieve the agreements laid down in the Paris Climate Agreement. Shell’s current policy creates ‘unlawful endangerment’, said lawyer Roger Cox, who was also previously responsible for the Urgenda case, in one of the hearings.

Appeal

The judges agree. The fact that Shell as a private party has no official role in the Paris Agreement was apparently not decisive in this regard. Milieudefensie has also made it sufficiently plausible that Shell’s policy is not in line with what Paris is asking. According to Shell itself, its business strategy is in line with Paris, as the company also said at the recent shareholders’ meeting. Many shareholders also appeared to doubt this. A motion by activist investor collective Follow This, calling for stricter policies, received support from 30 percent of shareholders, double last year.

Now we have to wait for environmental groups to hold other oil companies to account. But first, it is very likely that an appeal will follow in this case. Because it does not seem likely that Shell will simply accept the court’s ruling. The order to reduce CO₂ takes effect immediately, also as long as the appeal in the case is pending.