On 26 May 2021, a Dutch court sitting in The Hague allowed a claim by Friends of the Earth and other charities requiring Shell to limit its carbon emissions.
The court ordered that by 2030 Shell is to reduce its carbon emissions by 45% relative to 2019 levels. Shell has said it intends to appeal.
The decision is primarily based on an article in the Dutch Civil Code which imposes a tortious duty of care on legal persons not to cause social harm.
The decision applies to all Shell corporate entities consolidated within the Dutch holding company’s accounts. The court rejected arguments from Shell that it was a matter for the legislature, rather than the courts, to determine climate policies.
Whilst there is no analogous tortious duty in English law, where tort law is generally focused on damages caused by breach of a duty of care rather than injunctive relief of the type ordered here, litigation involving climate change on the basis of judicial review actions against public bodies has been a feature of the legal landscape since the 1990’s. Cases include the recent judicial review of expansion of Heathrow airport, which involved arguments that the UK was breaching its obligations under the Paris Climate Accord.
It is possible that as the government imposes further restrictions on carbon emissions on different categories of economic activity that there may be arguments between private parties over the costs of such interventions, particularly where these interventions cut across existing contracts. Whilst English courts generally defer to the executive on matters of policy such as climate change, English tort law does not have any fixed duties of care. In cases where a private party can demonstrate a relationship of sufficient proximity, an assumption of responsibility and that it is just and equitable to impose a duty of care it is possible to create new duties of care. It remains to be seen if the duties could be extended to cover climate change and carbon emissions. Given the growing focus of the world on the need to avoid climate change, this may be something that needs to be factored into wider business thinking outside extractive industries, transport and power generation, which have been the traditional targets for climate change intervention.
An official English translation of the Dutch court’s judgment is available here.