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Article

24 Jul 2023

Author:
Reuters (published on the Guardian)

UK: ClientEarth's case against Shell over allegedly misleading climate strategy refused by court for second time

"ClientEarth loses high court fight with Shell over climate strategy", 24 July 2023

An environmental law charity has lost an attempt to revive a lawsuit against Shell over its climate strategy after the high court in London refused permission to bring a case against the energy company.

ClientEarth, which holds 27 shares in Shell, argues that 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: “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 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”...

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