By Harry Price
At first glance, Shell’s appeal victory against green groups in the Netherlands might seem like a win for polluting companies, but the ruling may not be as much of a coup for them as it initially seems.
In April 2019, a case was filed in the Hague District Court alleging that Shell was in violation of its duty of care under both Dutch law and human rights obligations. Friend of the Earth Netherlands and its co-plaintiffs were seeking a ruling that would limit Shell’s CO2 emissions
Friends of the Earth Netherlands and its co-plaintiffs sought a court ruling that would require Shell to cut its CO2 emissions by 45% by 2030 from 2010 levels, and achieve net-zero emissions by 2050, aligning with the targets set in the Paris Climate Agreement.
Just over two years later, the court ruled in favour of Friends of the Earth Netherlands, ordering Shell to reduce its emissions by 45% by 2030 across all activities, including both its own emissions and end-use emissions. Importantly, the court declared its ruling as provisionally enforceable, meaning that Shell would have to enforce these cuts in emissions, even while the appeal process was ongoing.
The basis of the ruling is outlined in Book 6 Section 162 of the Dutch Civil Code, which prohibits actions that conflict with what is generally accepted under unwritten law.This standard means that it is unlawful to act in conflict with what is generally accepted according to unwritten law. As such, Shell was found to have a legal duty to take steps to prevent dangerous climate change. Additionally, Shell was claimed to have violated articles 2 and 8 of the European Convention on Human Rights – the right to life and the right to family life – by causing a danger to others when viable alternative measures could have been taken.
Following the ruling, Roger Cox, lawyer for Friends of the Earth Netherlands, said “This is a turning point in history. This case is unique because it is the first time a judge has ordered a large polluting corporation to comply with the Paris climate agreement. This ruling may also have major consequences for other big polluters.”
Promising to appeal the decision, a Shell spokesperson said, “Urgent action is needed on climate change, which is why we have accelerated our efforts to become a net-zero emissions energy company by 2050, in step with society, with short-term targets to track our progress. We are investing billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables, and biofuels. We want to grow demand for these products and scale up our new energy businesses even more quickly. We will continue to focus on these efforts and fully expect to appeal today’s disappointing court decision.”
In November 2024, the court announced the decision on Shell’s appeal. The court remained firm on the point of law that Shell had a legal duty to reduce its emissions. However, due to there being no accepted standard in climate science for the required amount of emissions that had to be cut, the 45% reduction was deemed not legally enforceable. The initial ruling had seemingly set a precedent that private companies could no longer just adhere to the law but that they must also adhere to global climate policy. While the appeal decision clarified that the duty to act remains, specific reduction targets lack legal enforceability, leaving private companies exempt from being forced to meet precise targets.
Shell in their defence, argued that the company was already cutting emissions, and that it was the responsibility of governments to change laws regarding emissions, rather than the responsibility of corporations to adhere to intergovernmental agreements. Shell announced that it is aiming to reduce the carbon intensity of products it sells by 15-20% by 2030 from a 2016 baseline and that it intends to become a “net zero” emissions company by 2050. The company also said that if people felt that their progress on cutting emissions was too slow, their efforts should focus on lobbying governments to implement policy changes, rather than placing the burden solely on Shell to drive this green transition.
A critical part of the ruling was the Court’s decision to focus on how to cut global emissions as a whole, rather than enforcing reductions on Shell alone. For example, if Shell were to reduce its scope 3 emissions (emissions produced indirectly in a companies value chain but not produced by the company itself) by reducing its resale of fossil fuels, this would not necessarily have the impact of reducing global emissions. This is because its customers may respond by purchasing fuels with a greater carbon intensity as an alternative. These are more harmful to the environment and emit more CO2. As a result, the lower court’s order might not have the desired effect of protecting Dutch citizens or global citizens from the effects of climate change.
Despite headlines declaring Shell’s victory in the appeal case, there are important factors businesses must consider in the future. First and foremost, the Dutch court still determined that Shell had an obligation to reduce their carbon emissions and hold themselves accountable for their impact on the climate. This means that future cases may still rule in favour of plaintiffs if companies don’t already have policies to reduce their emissions in effect. The case also proves that courts are willing to force companies to reduce emissions even outside the scope of national law, for example, drawing on global frameworks like the European Convention on Human Rights and the Paris Climate Agreement.
Finally, courts do face a challenge when dealing with cases of this nature, especially as they pertain to scope 3 emissions. As outlined prior, effects to reduce scope 3 emissions can harm the campaign to prevent further climate change rather than support it. This means that courts must be careful not to induce effects that have the potential to do greater harm to the environment and fail to actively tackle corporate responsibility for emissions.
In conclusion, while the appeal has ruled in Shell’s favour, the case will still be watched with intrigue by other judiciaries, governments, and corporations, all of whom have an interest in the ongoing fight for greater cuts to emissions. For now, Shell and other companies seem safe from being forced by courts to reduce their emissions, but the ruling has laid a legal foundation that could support future action (particularly as climate science advances). Additionally, the court’s decision highlights a larger issue where efforts to limit scope 3 emissions (at least at a corporate level), may end up doing more harm than good to the planet.
The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.
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