Rosie Frost
EURONEWS
Thu, 9 February 2023
Shell’s board of directors are being personally sued over their alleged failure to properly manage risks associated with the climate crisis.
The lawsuit says the British oil giant’s 11 directors have breached their legal duties under the UK’s Companies Act by failing to bring their climate strategy in line with the Paris Agreement.
Environmental law charity ClientEarth, which filed the lawsuit, says it is the first case in the world that looks to hold corporate directors personally responsible for failing to prepare for the energy transition.
“Shell may be making record profits now due to the turmoil of the global energy market, but the writing is on the wall for fossil fuels long term,” says Paul Benson, a senior lawyer at ClientEarth.
“The shift to a low-carbon economy is not just inevitable, it’s already happening.”
But the Shell board is persisting with a transition strategy that is “fundamentally flawed,” Benson claims. He says it leaves the company seriously exposed to the risks climate change poses to their success in the future - “despite the board’s legal duty to manage those risks”.
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Thu, 9 February 2023
Shell’s board of directors are being personally sued over their alleged failure to properly manage risks associated with the climate crisis.
The lawsuit says the British oil giant’s 11 directors have breached their legal duties under the UK’s Companies Act by failing to bring their climate strategy in line with the Paris Agreement.
Environmental law charity ClientEarth, which filed the lawsuit, says it is the first case in the world that looks to hold corporate directors personally responsible for failing to prepare for the energy transition.
“Shell may be making record profits now due to the turmoil of the global energy market, but the writing is on the wall for fossil fuels long term,” says Paul Benson, a senior lawyer at ClientEarth.
“The shift to a low-carbon economy is not just inevitable, it’s already happening.”
But the Shell board is persisting with a transition strategy that is “fundamentally flawed,” Benson claims. He says it leaves the company seriously exposed to the risks climate change poses to their success in the future - “despite the board’s legal duty to manage those risks”.
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Lawsuit against Shell has support from investors
ClientEarth filed the first of its kind climate case at the High Court of England and Wales in its capacity as a shareholder.
The legal claim also has the backing of institutional investors and pension funds who together own over 12 million of Shell’s 7 billion shares. These investors include pension funds like Nest - the UK’s largest workplace pension scheme - and London CIV in the UK and Swedish national pension fund AP3.
Investors want to see action in line with the risk climate change presents and will challenge those who aren’t doing enough to transition their business.
In a letter to the board of directors notifying them of the legal action last year, ClientEarth said its lawsuit was in the “best interests” of the company as the economy “inevitably shifts away from fossil fuels.”
They also said it was in the best interests of investors.
“Investors want to see action in line with the risk climate change presents and will challenge those who aren’t doing enough to transition their business,” says Mark Fawcett, Nest’s chief investment officer.
“We hope the whole energy industry sits up and takes notice.”
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Shell says its climate plans are ‘industry-leading’
Shell says its ‘Energy Transition Strategy’ - including its plan to be net zero by 2050 - is consistent with the 1.5C temperature goal of the Paris Agreement. The company also claims its plan to halve emissions by 2030 is “industry-leading”.
But ClientEarth says this covers less than 10 per cent of its overall emissions and independent assessments have found that Shell’s climate strategy is not Paris-aligned.
The environmental law charity is asking the high court to order Shell to adopt a strategy that properly manages climate risks and complies with a 2021 legal order by Dutch courts to cut emissions by 45 per cent.
'Climate Justice' placard seen during the demonstration outside Shell HQ in London. - SOPA Images/ Vuk Valcic / SOPA Images
A spokesperson from Shell said they “do not accept ClientEarth’s allegations”.
“Our directors have complied with their legal duties and have, at all times, acted in the best interests of the company.”
“ClientEarth’s attempt, by means of a derivative claim, to overturn the board’s policy as approved by our shareholders has no merit. We will oppose their application to obtain the court’s permission to pursue this claim.”
ClientEarth filed the first of its kind climate case at the High Court of England and Wales in its capacity as a shareholder.
The legal claim also has the backing of institutional investors and pension funds who together own over 12 million of Shell’s 7 billion shares. These investors include pension funds like Nest - the UK’s largest workplace pension scheme - and London CIV in the UK and Swedish national pension fund AP3.
Investors want to see action in line with the risk climate change presents and will challenge those who aren’t doing enough to transition their business.
In a letter to the board of directors notifying them of the legal action last year, ClientEarth said its lawsuit was in the “best interests” of the company as the economy “inevitably shifts away from fossil fuels.”
They also said it was in the best interests of investors.
“Investors want to see action in line with the risk climate change presents and will challenge those who aren’t doing enough to transition their business,” says Mark Fawcett, Nest’s chief investment officer.
“We hope the whole energy industry sits up and takes notice.”
‘Pure greenwashing’: Shell reports highest ever profits while labelling fossil gas as ‘renewable’
Exxon makes record €51 billion profit. Only 5% is going to ‘low-carbon’ projects
Shell says its climate plans are ‘industry-leading’
Shell says its ‘Energy Transition Strategy’ - including its plan to be net zero by 2050 - is consistent with the 1.5C temperature goal of the Paris Agreement. The company also claims its plan to halve emissions by 2030 is “industry-leading”.
But ClientEarth says this covers less than 10 per cent of its overall emissions and independent assessments have found that Shell’s climate strategy is not Paris-aligned.
The environmental law charity is asking the high court to order Shell to adopt a strategy that properly manages climate risks and complies with a 2021 legal order by Dutch courts to cut emissions by 45 per cent.
'Climate Justice' placard seen during the demonstration outside Shell HQ in London. - SOPA Images/ Vuk Valcic / SOPA Images
A spokesperson from Shell said they “do not accept ClientEarth’s allegations”.
“Our directors have complied with their legal duties and have, at all times, acted in the best interests of the company.”
“ClientEarth’s attempt, by means of a derivative claim, to overturn the board’s policy as approved by our shareholders has no merit. We will oppose their application to obtain the court’s permission to pursue this claim.”
Shell’s Board Sued Over Lack of Climate Ambition
Katharine Gemmell and William Mathis
Thu, February 9, 2023
(Bloomberg) -- Shell Plc faces a new front in climate litigation as lawyers, supported by a group of shareholders, sue the oil giant’s board in the UK.
Two years after a Dutch court ordered Shell to slash its emissions, ClientEarth are filing the first lawsuit of its kind anywhere in the world against 11 members of the board, accusing them of failing to manage the company’s climate risks.
The environmental law firm is bringing the suit under the UK’s Company Act against Shell’s board at London’s High Court, arguing that the their failure to approve an energy transition strategy that aligns with the Paris Agreement amounts to a breach of a director’s legal duties.
“The board is persisting with a transition strategy that is fundamentally flawed, leaving the company seriously exposed to the risks that climate change poses to Shell’s future success – despite the board’s legal duty to manage those risks,” said Paul Benson, a senior lawyer at ClientEarth.
The Paris Agreement was adopted in 2015 with a goal of slowing global warming to well below 2C, compared to pre-industrial levels. With record temperatures across much of the planet in 2022, and a series of catastrophic weather events, the severe effects of climate change are already being felt.
“We do not accept ClientEarth’s allegations,” a Shell spokesperson said. “Our directors have complied with their legal duties and have, at all times, acted in the best interests of the company.”
Fresh Strategy
Trying to hold board members legally accountable for their companies’ contributions to climate change marks a fresh strategy as lawyers and campaigners increasingly turn to the courts to try and pin some of the blame for the climate crisis on Big Oil. In the Netherlands at least, activists have had success.
Shell was ordered in 2021 by a court in The Hague to slash its greenhouse gas emissions 45% by 2030 compared to 2019 levels. It’s appealing the ruling as the court’s order is an acceleration of an existing strategy there are aspects of it that are just not feasible, Shell argues.
“Shell’s goal is to become a net zero emissions energy company by 2050,” the company said. “Appealing does not change this.”
Shell already has plans to halve emissions from its own business and the energy it purchases, by 2030 compared to 2016 levels. But those represent less than 10% of its overall carbon footprint, with most planet-warming gases emitted when its customers burn the fuel they buy from Shell.
While the company also has a goal of reaching net zero emissions across all its business by 2050, there’s not yet a clear plan how to do it. It was the oil and gas business that drove record-breaking profits of nearly $40 billion last year. And while Shell’s investment in its renewables unit hit an all-time high in 2022, it was less than half what the company spent on its business exploring for and extracting fossil fuels.
Renewables Pause
Wael Sawan, who took over as Shell’s chief executive officer in January, said he plans to grow the company’s natural gas business while Shell pauses growth in spending on its renewables unit. The CEO is focused on delivering value for shareholders.
“Our philosophy has been a real pivot toward energy transition investments,” Sawan said in a call with reporters on Feb. 2. “But we will make sure that those investments go into the areas where we can see line of sight toward attractive returns to be able to reward our shareholders.”
The lawsuit, which also alleges the directors failed to comply with the Hague ruling, is being supported by institutional investors including pension-fund manager London LGPS CIV Ltd, Nest, Swedish pension fund AP3, and Danske Bank Asset Management. Together they hold over 12 million shares in the company, still less than 0.2% of the total.
“Recognizing the dual materiality of this global emergency and the associated financial opportunities associated with the green transition,” London CIV has a duty to its beneficiaries to understand climate risk, Jacqueline Amy Jackson, head of responsible investment, said in a letter of support to ClientEarth.
Katharine Gemmell and William Mathis
Thu, February 9, 2023
(Bloomberg) -- Shell Plc faces a new front in climate litigation as lawyers, supported by a group of shareholders, sue the oil giant’s board in the UK.
Two years after a Dutch court ordered Shell to slash its emissions, ClientEarth are filing the first lawsuit of its kind anywhere in the world against 11 members of the board, accusing them of failing to manage the company’s climate risks.
The environmental law firm is bringing the suit under the UK’s Company Act against Shell’s board at London’s High Court, arguing that the their failure to approve an energy transition strategy that aligns with the Paris Agreement amounts to a breach of a director’s legal duties.
“The board is persisting with a transition strategy that is fundamentally flawed, leaving the company seriously exposed to the risks that climate change poses to Shell’s future success – despite the board’s legal duty to manage those risks,” said Paul Benson, a senior lawyer at ClientEarth.
The Paris Agreement was adopted in 2015 with a goal of slowing global warming to well below 2C, compared to pre-industrial levels. With record temperatures across much of the planet in 2022, and a series of catastrophic weather events, the severe effects of climate change are already being felt.
“We do not accept ClientEarth’s allegations,” a Shell spokesperson said. “Our directors have complied with their legal duties and have, at all times, acted in the best interests of the company.”
Fresh Strategy
Trying to hold board members legally accountable for their companies’ contributions to climate change marks a fresh strategy as lawyers and campaigners increasingly turn to the courts to try and pin some of the blame for the climate crisis on Big Oil. In the Netherlands at least, activists have had success.
Shell was ordered in 2021 by a court in The Hague to slash its greenhouse gas emissions 45% by 2030 compared to 2019 levels. It’s appealing the ruling as the court’s order is an acceleration of an existing strategy there are aspects of it that are just not feasible, Shell argues.
“Shell’s goal is to become a net zero emissions energy company by 2050,” the company said. “Appealing does not change this.”
Shell already has plans to halve emissions from its own business and the energy it purchases, by 2030 compared to 2016 levels. But those represent less than 10% of its overall carbon footprint, with most planet-warming gases emitted when its customers burn the fuel they buy from Shell.
While the company also has a goal of reaching net zero emissions across all its business by 2050, there’s not yet a clear plan how to do it. It was the oil and gas business that drove record-breaking profits of nearly $40 billion last year. And while Shell’s investment in its renewables unit hit an all-time high in 2022, it was less than half what the company spent on its business exploring for and extracting fossil fuels.
Renewables Pause
Wael Sawan, who took over as Shell’s chief executive officer in January, said he plans to grow the company’s natural gas business while Shell pauses growth in spending on its renewables unit. The CEO is focused on delivering value for shareholders.
“Our philosophy has been a real pivot toward energy transition investments,” Sawan said in a call with reporters on Feb. 2. “But we will make sure that those investments go into the areas where we can see line of sight toward attractive returns to be able to reward our shareholders.”
The lawsuit, which also alleges the directors failed to comply with the Hague ruling, is being supported by institutional investors including pension-fund manager London LGPS CIV Ltd, Nest, Swedish pension fund AP3, and Danske Bank Asset Management. Together they hold over 12 million shares in the company, still less than 0.2% of the total.
“Recognizing the dual materiality of this global emergency and the associated financial opportunities associated with the green transition,” London CIV has a duty to its beneficiaries to understand climate risk, Jacqueline Amy Jackson, head of responsible investment, said in a letter of support to ClientEarth.
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