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Shell directors could be sued over climate transition plans

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  • ClientEarth alleges breach of UK Companies Act
  • Wrote to board before filing court documents
  • Alleges that the climate transition plan is not good enough

LONDON, March 15 (Reuters) – Environmental lawyers ClientEarth said on Tuesday they were preparing legal action against the directors of Shell (SHEL.L) over the company’s climate transition plan, in what they said was the first such case.

ClientEarth lawyers said they seek to hold directors personally liable for what they consider a failure to adequately prepare for the global shift to a low-carbon economy, alleging an alleged breach of directors’ duties. directors under the UK Companies Act.

ClientEarth said it had written to Shell advising it of its claim and was awaiting its response before filing documents with the High Court of England and Wales. For the case to proceed, ClientEarth would then need permission from the court to do so.

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In a written response to Reuters, Shell said it was implementing its global strategy that supported the Paris Climate Agreement, including “transforming our business to deliver more low-carbon energy to our customers. “.

“Tackling a challenge as big as climate change requires action from all sides. The energy supply challenges we are seeing underscore the need for effective government-led policies to address critical needs such as energy security while decarbonizing our energy system. These challenges cannot be resolved through litigation,” Shell said.

Energy companies face a challenge to their business model as countries seek to reduce the use of fossil fuels, a major cause of man-made global warming, and achieve net zero greenhouse gas emissions by the middle of the century.

Shell has pledged to halve emissions from its operations by 2030, but its net-zero goal to cut emissions from the use of its products – the bulk of an oil and gas company’s emissions – n wasn’t ambitious enough, said ClientEarth. Read more

Shell’s net zero goal was also not reflected in the company’s operating plans or budgets, ClientEarth added.

The quality of the company’s climate transition plan has already been challenged by a court in the Netherlands which last year ordered it to go further. Shell is appealing the decision. Read more

UN climate scientists reiterated the need for faster global action and said failure to meet the Paris Agreement target of limiting warming to well below 2 degrees Celsius above pre-industrial standards would cause irreparable damage. Read more

ClientEarth said it was suing Shell’s directors for an alleged breach of UK companies law, which requires them to act in a way that promotes the success of the business, and to do so while showing due diligence. of reasonable care, skill and diligence.

ClientEarth said it was taking the action as a Shell shareholder on behalf of all stakeholders to help protect the company’s long-term viability.

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Reporting by Simon Jessop. Editing by Jane Merriman

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