In 1991, the oil giant Shell released a 28-minute educational film that warned of the dangers of burning fossil fuels. It stated that floods, famines, extreme weather and other disasters would become more frequent as greenhouse gases warm the planet. “Action now is seen as the only safe insurance,” the film concluded. But over the next three decades, Shell—the second-largest publicly traded oil and gas firm in the world—would fail to minimise its own role in the unfolding crisis. A Dutch court decision handed down two weeks ago, however, could effectively force Shell to play its part in preventing a climate catastrophe.
On 26th May, the court in The Hague ruled that Shell must reduce its greenhouse gas emissions by 45 per cent within ten years. The company has previously pledged a cut of 20 per cent by 2030 and vowed to reach carbon neutrality by 2050. However, judge Larisa Alwin determined that these plans were not concrete enough and that the public interests served by the reduction obligation outweigh the commercial interests of Shell itself. According to Friends of the Earth Netherlands, which brought the case alongside six other NGOs and 17,000 Dutch citizens, the ruling marks the first time a judge has ever held a corporation liable for causing climate change.
“Over the last few years, courts around Europe have found that a government’s climate plan might be inadequate, but this is the first time that a court has found that a company’s climate plan is inadequate,” explains Paul Benson, a lawyer at environmental law charity ClientEarth. “And it’s the first time that a corporate group has been ordered to cut its emissions, including those from the products it sells, in line with the timeline of the Paris Agreement.”
There is already something of a precedent for world-leading climate litigation in the Netherlands. The Urgenda Foundation, a climate campaign group, sued the Dutch state in 2013 over its inaction on greenhouse gas reductions. The District Court of The Hague ultimately ruled the country had to cut its emissions by at least 25 per cent compared to 1990 levels by the end of 2020. The case was the first in the world in which citizens established that their government has a legal obligation to prevent dangerous climate change.
Despite appeals by the state, the Dutch Supreme Court upheld the Urgenda decision in 2019. Shell has also indicated that it plans to appeal last month’s “disappointing” court decision, a process that will likely take years from start to finish. However, the judgment is also provisionally enforceable, meaning that Shell has to begin implementing changes now—not once it has battled through its appeal. Sara Shaw of Friends of the Earth International said in a statement that the organisation hoped the verdict “will trigger a wave of climate litigation against big polluters.”
It wasn’t so long ago that judges tended to favour corporations in climate litigation rulings. When in 2008 native Alaskans sought damages from oil companies for the impacts of climate change on their village, the lawsuit was dismissed in a district court. The judge in the case, Native Village of Kivalina v ExxonMobil Corp, ruled that the regulation of greenhouse gas emissions was a political rather than a legal issue—and therefore could only be resolved by legislators. A similar conclusion was reached in a 2010 case in which plaintiffs sought to hold oil companies responsible for damage to their properties caused by Hurricane Katrina.
What’s unique about the Shell verdict is that human rights arguments were used to demonstrate that corporations have a climate-related duty of care to society as a whole. More specifically, it was alleged that Shell breached article 6:162 of the Dutch civil code and violated articles 2 and 8 of the European Convention on Human Rights, which protect the right to life and the right to respect for family life. Though similar cases will be determined on their individual merits, Benson believes that the notion that companies owe a duty of care to citizens will be powerful in other jurisdictions.
“What we have in this case is a court effectively finding that a company’s climate risk management policy was so poor as to be unlawful,” Benson says. “I think that’s a really strong signal to other companies in the oil and gas sector, and even far beyond it. I think all high-emitting companies will rightly be looking over their shoulders.”
While many of the climate cases heard in UK courts have been brought against the government by activists and green NGOs, last week’s ruling in the Netherlands shows that legal pressure can be applied against corporations in the service of the planet. The tension between oil companies’ plans and the actions needed to minimise global temperature rise are growing clearer all the time.
