CITYA.M.
Shell lawsuit: Institutional investors back legal challenge over climate risk
CITY AM REPORTER: SATURDAY 11 FEBRUARY 2023
A group of European institutional investors is backing a novel London lawsuit against energy giant Shell’s board over alleged climate mismanagement in a case that could have far-reaching implications for how companies tackle emissions.
Client Earth, an environmental law charity turned activist Shell investor, said it had filed a High Court claim on Wednesday, alleging Shell’s 11 directors have failed to manage the “material and foreseeable” risks posed to the company by climate change – and that they are breaking company law.
It is the first, notable lawsuit by a shareholder against a board over the alleged failure to properly prepare for a shift away from fossil fuels – and comes one week after Shell posted a record $40 billion profit for 2022, partly fuelled by the energy crunch after Russia’s invasion of Ukraine.
Shell rejected the allegations, saying its climate targets were ambitious and on track and that its directors complied with their legal duties and acted in the company’s best interests.
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