The Guardian
Shell directors personally sued over ‘flawed’ climate strategy
Claimants ClientEarth say the oil company’s plan puts the company at financial risk as the world transitions to clean energy
Damian Carrington Environment editor: Thu 9 Feb 2023 06.01 GM
The directors of oil major Shell are being personally sued over their climate strategy, which the claimants say is inadequate to meet climate targets and puts the company at risk as the world switches to clean energy.
Environmental lawyers ClientEarth have filed the lawsuit against the 11 directors at the high court in England. It is the first case in the world seeking to hold corporate directors liable for failing to properly prepare their company for the net zero transition, ClientEarth said.
ClientEarth, which has a token shareholding in Shell, is suing under the UK Companies Act, and is supported by a group of large pension funds and other institutional investors. It argues a global transition to low-carbon energy is inevitable as world governments act to end the climate crisis and that Shell’s failure to move fast enough threatens the company’s success and would waste its investors’ money on unneeded fossil fuel projects.
“Shell may be making record profits now, but the writing is on the wall for fossil fuels long term,” said ClientEarth lawyer Paul Benson. “The shift to a low-carbon economy is not just inevitable, it’s already happening. Yet the board is persisting with a transition strategy that is fundamentally flawed, despite the board’s legal duty to manage those risks.
“Long term, it is in the best interests of the company, its employees and its shareholders – as well as the planet – for Shell to reduce its emissions harder and faster than the board is currently planning,. The International Energy Agency said in 2021 that no new oil and gas projects were compatible with net zero emissions by 2050. “Doubling down [by Shell] on new oil and gas projects isn’t a credible plan – it’s a recipe for stranded assets,” Benson said.
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