Milieudefensie et al v Royal Dutch Shell

Milieudefensie et al v Royal Dutch Shell
Court	District court of The Hague
Decided	26 May 2021 (2021-05-26)
ECLI	ECLI:NL:RBDHA:2021:5337
Transcript(s)	in Dutch; in English
Case opinions
The policy, policy intentions and ambitions of RDS for the Shell group are incompatible with RDS’ reduction obligation. The claimed order to comply with that obligation must be allowed. The order will be declared provisionally enforceable.
Court membership
Judge(s) sitting	Larisa Alwin, Irene Kroft and Michiel Harmsen

Milieudefensie et al v Royal Dutch Shell was a case heard by the district court of The Hague in the Netherlands in 2021 related to efforts by multinational corporations to curtail carbon dioxide emissions. In May 2021, the court ordered Royal Dutch Shell to reduce its global carbon emissions from its 2019 levels by 45% by 2030. It is considered to be the first major climate change litigation ruling against a corporation.

Background[]

Following the global adoption of the Paris Agreement in 2016, which aimed to limit the rise in the global average temperature to under 2°C through various milestones at 2030 and beyond, large corporations operating in signatory countries began evaluating if they could alter operations to meet the targets of the Agreement. The British-Dutch multinational Royal Dutch Shell (hereafter Shell) is one of the largest oil and gas companies in the world; its headquarters are in the Netherlands, a signatory to the Agreement. Shell is the ninth-largest corporate contributor to global pollution, producing about 1% of global emissions.^[1][2] As the Agreement was being developed, Shell evaluated its businesses to determine what it could do to address emissions, but had stated in 2014 that it believed that the Paris targets were unattainable and did not plan to change its business model away from oil and gas.^[1] Following the signing of the Agreement, Shell issued a statement that it would address its emissions, releasing a plan that called for reductions of its carbon dioxide emissions by 30% by 2035, compared to 2016 levels, and by 65% by 2050.^[1]

Environmental activists saw this plan as far slower than the requirements set out by the Paris Agreement. Seven environmental foundations — Milieudefensie, Greenpeace, Fossielvrij, Waddenvereniging, Both ENDS, Jongeren Milieu Actief, and ActionAid — and 17,379 individual claimants in the Netherlands filed a class-action lawsuit against Shell in April 2019, arguing that Shell could change its business model to invest more in renewable energy, and reach an emissions reduction target of 45% by 2030.^[1][3] By failing to change to this alternative model, the suit argued, Shell had failed to uphold the unwritten standard of care laid down in Book 6 Section 162 of the Burgerlijk Wetboek (Dutch Civil Code) as well as articles 2 and 8 of the European Convention on Human Rights.^[1][4][5] Shell stated in response to the lawsuit that it was doing its part to address climate change, and that "What will accelerate the energy transition is effective policy, investment in technology and changing customer behaviour. None of which will be achieved with this court action. Addressing a challenge this big requires a collaborative and global approach."^[1]

Trial[]

Hearings at the district court at The Hague were held in December 2020. The plaintiffs were required under Dutch law to demonstrate that a viable alternative business model existed for Shell to achieve the suggested 45% reduction goal, and had used the recent transformation of Danish company Ørsted from fossil fuels to renewables as a viable example.^[1] During the trial, Shell issued a pledge in February 2021 to be net-zero by 2050.^[6] Plaintiffs considered Shell's pledge to be inadequate as the company would fail to meet the Paris Agreement goals.^[7]

The court issued its decision on 26 May 2021. In its ruling, the court found Shell's current sustainability policy to be insufficiently "concrete", and that its emissions were greater than that of most countries.^[7] Due to these factors, the court ordered that Shell must reduce its global emissions by 45% by 2030 compared to 2019 levels; the reduction targets include emissions from its suppliers and buyers.^[2] The court declared the order provisionally enforceable, meaning that the order has immediate effect, even if one of the parties appeals the ruling.^[7][8][9]

The case was considered a landmark ruling in environmental law related to climate change: while previous lawsuits against governments have prevailed for improving emissions, this was considered the first major suit to hold a corporation to the tenets of the Paris Agreement.^[7] While the decision only has jurisdiction in the Netherlands,^[10] it is expected to set a precedent for other environmental lawsuits against other large companies with high emissions that have not taken sufficient steps to reduce their emissions.^{[2][8][9][11][12]} The impact of the court's decision was considered by legal experts to be strengthened due to its reliance on human rights standards and international measures on climate change.^[2][7][13]

Shell has stated that it plans to appeal the ruling.^[2][14]

See also[]

• State of the Netherlands v. Urgenda Foundation

References[]