It was until then one of the most emblematic decisions in the lawsuits brought against companies in terms of climate inaction, and it has just been partly overturned by the Dutch courts. In 2021, after being seized by several NGOs, the Hague court rendered a historic judgment, condemning the oil company Shell to accelerate its policy to combat global warming and its strategy to reduce greenhouse gas emissions on its entire value chain. But the company has finally won its appeal, the Hague Court of Appeal having reversed part of its conviction.
Judge Carla Joustra, who presided over the court, notably considered that Shell was on the right track regarding the objectives of reducing its direct emissions (known as scope 1 and scope 2), and overturned the initial decision which obliged the company to reduce by 2030 by 45% of its overall emissions on what is called scope 3 (i.e. all emissions linked to the company's activities, including those linked to the use of products that 'she markets). Through its general director Wael Saman, Shell said it was satisfied with the decision rendered by the court of appeal: “we think [que cette décision est] the right one for the global energy transition, the Netherlands and our company”, declared the leader.
“Insufficient data”
For their part, environmental protection associations took note of the decision, while welcoming the court's confirmation of Shell's obligation to reduce greenhouse gas emissions. “It hurts”, concedes Donald Pols, director of the Milieudefensie association, at the origin of the complaint in the Netherlands, while recalling that “The judge said large companies such as Shell have a responsibility to respect human rights and reduce CO2 emissions in line with international climate agreements.” In its decision, the court recalls that the social and environmental responsibility of large companies obliges them to put in place plans to reduce greenhouse gas emissions consistent with the objectives of the Paris Climate Agreement. It particularly highlights emerging regulations such as the European Duty of Vigilance Directive (CS3D), which makes it possible to call into question the legal liability of companies operating in Europe when they do not fulfill their climate vigilance obligations.
But the judge considered that the data was “insufficient” to force Shell to comply with a specific reduction target for its scope 3 emissions, as did the decision of the first instance judges in 2021. “The percentages mentioned in the reports [sur l’évolution du climat, ndlr] are so varied that a civil court cannot determine which Shell reduction target should be met”commented judge Carla Joustra, quoted by Reuters. The judge also considered that imposing a precise reduction target on Shell without it applying to other companies in the sector could create a harmful distortion of competition.
Obligation to accelerate decarbonization
However, Shell's victory on appeal does not mean a total setback in terms of climate justice. The court in fact made a point of recalling that the courts were justified in ordering private companies to accelerate their decarbonization strategies, opening the door to future litigation regarding climate inaction. It also concluded that exploration and new investments in fossil fuels could be legally considered incompatible with the Paris Agreement. “The decision expressly opens the door for a request regarding the cessation of exploration of new oil and gas fields and the reduction of corresponding production […] be favorably received,” the Friends of the Earth France association said in a press release.
“The court's decision clearly shows that investors, the owners of the company, have a key role to play in forcing the company to meet its climate obligations and moving it towards clean energy,” commented Mark van Baal, founder of Follow This, a shareholder group which aims to force large oil companies to reduce their emissions through shareholding. In light of this decision, “Investors should reconsider their support for Shell’s inadequate climate strategies and align their vote with their moral, environmental and financial obligations,” he adds. If the Milieudefensie association, which initiated the complaint, decides to appeal the decision, it will be up to the Supreme Court of the Netherlands to decide.
In France, the oil major TotalEnergies is also being taken to court for climate inaction by several associations fighting against global warming, who consider that its investment plan in fossil fuels for the coming years is incompatible with the objectives of the Paris Agreement. The first climate trial for TotalEnergies was deemed admissible last June, and should be studied on its merits in the coming months.
