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9 Feb 2023

UK: Shell's shareholder files lawsuit against company directors over alleged failure to timely reduce emissions

In January 2023, ClientEarth, announced it filed a lawsuit against Shell's 11 Directors. The legal action before the London High Court in the UK alleges that Shell’s Board breached its legal duties under the UK Companies Act to manage the climate risk facing the company.

The organisation that has shares in Shell says it is the "the first time ever that a company’s board has been challenged on its failure to properly prepare for the energy transition". It is supported by large pension funds and other institutional investors.

Shell declared: “We do not accept ClientEarth’s allegations. Our directors have complied with their legal duties and have, at all times, acted in the best interests of the company. We believe our climate targets are aligned with the more ambitious [1.5C] goal of the Paris agreement."

In May 2023, the High Court dismissed the lawsuit. ClientEarth said it would challenge this decision at an oral hearing.

In July 2023, the case was refused by the same judge for a second time.

In November 2023, ClientEarth's application to appeal the decision was rejected by the Court of Appeal, making the decision to dismiss the case final. 

In January 2024, ClientEarth released a full legal briefing for the case. They are arguing that the dismissal is a missed opportunity to hold Shell’s directors personally liable for failing to properly manage the material and foreseeable risks posed to the company by climate change.