Royal Dutch Shell Ordered to Cut Emissions by 45% by 2030 in Landmark Case

On the 26th May this year, Royal Dutch Shell, a British-Dutch multinational, was ordered by a Dutch civil court to cut it’s CO2 emissions by 45% compared to 2019 levels, by 2030. The lawsuit was filed in April 2019 by seven activist groups including Friends of the Earth and Greenpeace on behalf of 17,200 Dutch citizens. The unprecedented ruling was reached after the oil giant’s sustainability policy was found to be insufficiently “concrete” and it could have far reaching consequences for the rest of the global fossil fuel industry and other polluting multinationals.

Some major oil companies have already begun to make changes as a result of the greater global focus on cutting emissions. Chevron investors have recently voted in favour of a proposal to cut its customer emissions, while shareholders at Exxon have elected two climate activists to its board after months of arguing over its business direction.

Many believe that the landmark case is a “turning point in history”.  Friends of the Earth said that it’s the first time that a company has been legally obliged to align its policies with the Paris climate accords. Almost 200 countries agreed to keep global temperatures “well below” 2C above pre-industrial levels under the terms of the Paris agreement on climate change, a legally binding treaty that came into force on 4th November 2016.

Shell was found in breach of article 6:162 of the Dutch civil code and to be violating articles 2 & 8 of the European convention of human rights, the right to life and the right to family life by causing a danger to others when alternative measures could be taken.

The court’s verdict said that the Shell group was responsible for its own CO2 emissions and those of its suppliers. Though Shell had pledged to reduce its emissions of greenhouse gases by 20% by 2030 and to net zero by 2050 the court in the Hague did not consider that this was fast enough. The lawyers for the plaintiffs argued that Shell had been aware for decades of the dangerous consequences of CO2 emissions, but its targets had remained insufficiently robust. It’s no longer enough for firms to comply with the law on their emissions, they may be forced to comply with global climate policy too.

Roger Cox, lawyer for Friends of the Earth in the Netherlands said:

“This case is unique because it is the first time a judge has ordered a large polluting corporation to comply with the Paris climate agreement. This ruling may also have major consequences for other big polluters.”

Roger Cox is asking organisations across the world to take legal action to force multinationals to play their full part in tackling the climate emergency.

The Shell verdict alone will be a warning to companies round the world that the battle against climate change may ultimately spell the end of anything resembling “business as usual”.

Donald Pols, a director at Friends of the Earth said in a statement:

“This is really great news and a gigantic victory for the earth, our children and for all of us. The judge leaves no doubt about it: Shell is causing dangerous climate change and must now stop it quickly.”

Bas Eickhout, a Green MEP on the European parliament’s environment committee, said:

“This ruling is really good news for the climate. It increases the pressure on large polluters and helps us in Europe to tighten climate policy for them as well. They can no longer escape the climate crisis: the international climate targets must also apply to them.”

Shell said it was disappointed and plans to appeal the ruling, but this comes at a time when there is already mounting pressure on energy companies from investors, activists, and governments to move away from fossil fuels and to rapidly ramp up investment in renewables.

In their defence a Shell spokesperson said:

“Urgent action is needed on climate change, which is why we have accelerated our efforts to become a net-zero emissions energy company by 2050. We are investing billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables and biofuels”.

The company also argues that if people feel that progress towards cutting emissions is too slow, they should lobby governments and not Shell, to change policies and introduce financial incentives.

However, it may well be necessary to both lobby governments and take legal action against the big polluters, in order to reach global climate targets.

There is a lot of hope riding on this court ruling with many climate change activists and campaign groups hoping that the verdict will trigger a surge of legal action against the big polluters to force them to stop extracting and burning fossil fuels.

Tom Cummins, dispute resolution partner at law firm Ashurst said:

“This is arguably the most significant climate change related judgment yet, which emphasises that companies and not just governments may be the target of strategic litigation which seeks to drive changes in behaviour.”