ClientEarth loses bid to revive UK Shell lawsuit over climate strategy - Reuters
ClientEarth loses bid to revive UK Shell lawsuit over climate strategy | Reuters
ClientEarth loses bid to revive UK Shell lawsuit over climate strategy
LONDON, July 24 (Reuters) - Environmental law charity ClientEarth on Monday lost its bid to revive a landmark lawsuit against Shell (SHEL.L) over its climate strategy, as London’s High Court refused permission to bring a case against the energy giant.
ClientEarth, which holds 27 shares in Shell, alleges the company cannot achieve its aim of net zero carbon emissions by 2050 with its current climate transition strategy and its directors are therefore breaching their duties to shareholders.
Its lawsuit was initially rejected in May by Judge William Trower, who again refused permission to bring the case in a written ruling on Monday.
The judge said ClientEarth's case "ignores the fact that the management of a business of the size and complexity of that of Shell will require the directors to take into account a range of competing considerations", in which the courts should not interfere.
If the lawsuit had been allowed to proceed, it could have opened the door for investors in other companies to sue boards that allegedly fail to adequately manage climate-related risks.
A Shell spokesperson said in a statement: "This is the right outcome – the court has reaffirmed its decision that this claim is fundamentally flawed and has, once again, dismissed it.
"We believe our directors have always complied with their duties and acted in the company's best interest. This claim entirely ignores how directors of a business as large and complex as Shell must balance a range of competing considerations."
Paul Benson, a senior lawyer at ClientEarth, said the charity was disappointed with the decision and intended to pursue an appeal.
He said in a statement that Shell's "refusal to take decisive action to prepare the company for the fast-advancing energy transition puts Shell's future commercial viability at risk and, we maintain, is in breach of the board's duties".
Our Standards: The Thomson Reuters Trust Principles.
Related Knowledge Center: Climate diplomacy
Talks are well underway in preparation for the next major international meeting on climate change, 28th Conference of the Parties (COP28), scheduled to begin Nov. 30 in the United Arab Emirates.
Much like last year’s COP27, finances — specifically, aid to developing nations — will be at the center of conference deliberations.
The conference faces an even greater sense of urgency brought on by the Sept. 8, 2023, release of the first global stocktake, which calls for accelerated action to meet the goals set in the 2015 Paris Climate Agreement (COP21).
Climate diplomacy: COP 27 | Climate diplomacy: COP 28 | Climate diplomacy: COP 29