LITIGATION TRENDS 2025 | 61 T O C E M P E S G A N T I I P C A P R O W C S P O R T C O N T A C T I N T A P P P A T C C L S E C ecological degradation. A notable example is a number of legal cases involving Shell, which has faced litigation in both the Netherlands and the United Kingdom over its environmental practices. In April 2019, Milieudefensie (Friends of the Earth Netherlands), together with other environmental associations and 17,319 individuals, sued Shell in the Netherlands on the basis that its net CO2 emissions violate its duty of care to contribute to the mitigation of climate change under Dutch and human rights law. In 2021, the District Court of The Hague ruled in the claimants’ favor and required Shell to reduce its carbon emissions, finding that, as a corporate entity, it had an obligation to (i) reduce its net CO2 emissions of 45% by 2030 to ensure compliance with the Paris Agreement; and (ii) limit the human rights impacts associated with climate change. However, in November 2024, the Court of Appeal affirmed Shell’s appeal, finding that its frequent change of plans to reduce Scope 1 and 2 emissions did not demonstrate that it will ultimately fail to implement them. The absence of scientific consensus and sectoral standard for the oil and gas industry regarding Scope 3 emissions (85% of Shell’s total emissions) likewise prevented the Court from pinpointing a concrete reduction obligation. Shell had argued that it did not produce 2/3 of the fuels sold to customers but purchased them from third-parties; accordingly, it should not be held liable as such fuels would end up being purchased by other market parties. The Court agreed, finding that Milieudefensie had failed to: (i) demonstrate the correlation between such sales reduction and a drop in emissions; and (ii) challenge the District Court’s ruling that Shell had the freedom to decide how to fulfil its reduction obligation. Significantly, the Court stressed that whilst “primarily” the responsibility of legislators and governments, companies may be responsible to “counter dangerous climate change.” Non-binding guidelines (e.g. UN Guiding Principles and OECD Guidelines) were M P S relevant in defining the applicable social standard of care. Likewise, existing EU Regulations (e.g. EU Emissions Trading System and the EU Corporate Sustainability Due Diligence Directive) did not preclude a duty of care from arising under Dutch law. The Court emphasised that the “climate problem [was] the greatest issue of our time” and “more could be expected of Shell than of most companies” due to it being a “major player in the fossil fuel market for over 100 years” and continuing “to occupy a prominent position in that market today.” This implied an obligation to limit CO2 emissions, even if this obligation were not expressly laid down in the regulations of the countries in which Shell operates. Separate to the Dutch proceedings, cases have also been brought in various guises against Shell in England, including a derivative claim against Shell’s directors by ClientEarth in 2023 and by Nigerian communities affected by oil spills in the Niger Delta. In the former case, the High Court dismissed the claim against directors of Shell, which alleged that they failed to adopt a reasonable and proportionate climate risk management strategy, further alleging this amounted to breaches of their duties under sections 172 and 174 of the Companies Act 2006 (ClientEarth v Shell’s Board of Directors [2023] EWHC 1897 (Ch)). In November 2023, the Court of Appeal refused permission to appeal to ClientEarth, primarily on procedural grounds (including that ClientEarth is only a very small shareholder). In the latter case, the claimants allege that decades of oil spills have severely contaminated their lands and waterways, devastating their health and livelihoods. Shell, however, asserts that the majority of spills result from illegal activities such as theft and sabotage, contending that it should not be held liable for pollution caused by third parties. In December 2024, the Court of Appeal in England overturned a High Court ruling (Alame CROSS-PRACTICE FOCUS Environmental, Social & Governance 60 | Weil, Gotshal & Manges LLP
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