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Climate Lawsuit Against Shell Directors Dismissed
May 16, 2023On May 12, 2023, the UK High Court dismissed a lawsuit filed by ClientEarth against Shell’s Board of Directors, finding that ClientEarth failed to establish a prima facie case against the Board for its management of climate risks. The lawsuit asserted that the directors violated duties under the Companies Act, which creates a duty to promote the success of the company and to act with reasonable care, skill, and diligence. ClientEarth claimed that, among other things, Shell was required to adopt and implement an energy transition strategy consistent with the Paris Agreement in discharge of these obligations. Shell’s “Energy Transition Strategy,” according to the complaint, fails to align with the Paris Agreement because although it establishes a 2050 net-zero target, it excludes short- and medium-term targets to cut scope 3 emissions when such emissions account for 90% of the company’s overall emissions and are calculated to be reduced by just 5% by 2030. ClientEarth sought an order compelling Shell to amend its plan to address these deficiencies.
