A landmark ruling came on May 26 when a Dutch Court ordered Royal Dutch Shell to cut its carbon emissions by a net 45 percent by 2030, compared to 2019 levels. The major Anglo-Dutch fossil fuel company is held accountable for its contribution to climate change, as it classified one of the 10 most climate polluting company in the world.
For this reason, this judgment represents an important victory in the climate change jurisprudence, as for the first time, a company has been legally obliged to align its policies with the Paris climate accords.
As a matter of fact, this ruling may also have major consequences for other big polluters as climate chase-related claims against corporation are on the rise.
This case is one of a number ongoing across the world in which claimants seek to hold companies liable for a breach of a duty of care owed in relation to human rights and environmental harms.
The Milieudefensie et al. v. Shell case
On Monday, April 5th, 2019, the Dutch interest group Milieudefensie (“Friends of the Earth Netherlands”) filed a complaint to the District Court of the Hague. calling Royal Dutch Shell’s liability and legal obligations concerning climate change.
The case was brought to the Court along with Greenpeace Netherlands, ActionAid NL, Both ENDS, Fossielvrij NL, Jongeren Milieu Actief, the Waddenvereniging and 17,379 individual co-plaintiffs.
The pleaders argued that given the Paris Agreement’s goals and the scientific evidence regarding the dangers of climate change, Shell has a duty of care to take action to reduce its greenhouse gas emissions (“GHG”).
As a matter of fact, under the Paris Agreement, nations have committed to a long-term goal of limiting the average temperature rise to below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit it even further to 1.5C. Emissions have, however, grown by an average 1.4 percent per year since 2010, with a steeper increase of 2.6 percent last year due, partly due to a large increase in forest fires.
For this reason, plaintiffs have based their argument against Shell on the duty of care (Article 6:612 Dutch Civil Code, which is the general basis for claims for damages that arise from torts) to take action to reduce its greenhouse gas emissions. The claimants also sustained that the company was in violation of Article 2, related to the right to life, and Article 8, related to the right to respect for private and family life, of the European Convention by causing danger to other when alternative measures could be taken.
The decision of the Dutch Court
In this decision, the Dutch Court held the Royal Dutch Shell (“RDS”) in violation of the standard of care under Dutch law and obligations under the European Convention.
“Therefore, the court has ordered Royal Dutch Shell to reduce the emissions of the Shell group, its suppliers and its customers by net 45%, as compared to 2019 levels, by the end of 2030, through the corporate policy of the Shell group,” read the court summary.
It gave Shel flexibility in allocating emissions cuts between Scope 1, 2, and 3 emissions, so long as in aggregate, the total emissions were reduced by 45%.
It ruled that Shell’s policy “is not concrete, has many caveats and is based on monitoring social developments rather than the company’s own responsibility for achieving a CO2 reduction”.
Moreover, the Dutch Court acknowledges that Royal Dutch Shell cannot solve the global problem of limitation and emissions reduction. However, “this does not absolve RDS of its individual partial responsibility to do its part regarding the emissions of the Shell group, which it can control and influence.” For this reason, it also added that the RDS is “dependent on the pace at which global society moves towards the climate goals of the Paris agreement”and that the “emissions reduction targets for 2030 are lacking completely”.
The Urgenda Foundation v. State of the Netherlands case
The claim follows the Dutch Supreme Court’s landmark decision in the Urgenda case (“Urgenda Foundation v. State of the Netherlands”) in which it held that the Dutch State has a positive obligation under the European Convention on Human Rights to reduce emissions of greenhouse gasses by at least 25% by the end of 2020 measured against 1990. In this decision, the Dutch Supreme Court found that the Netherlands breached Article 2, related to the right to life, and Article 8, related to the right to respect for private and family life, of the European Convention.
The Supreme Court found that the resolutions containing such a target established a high degree of consensus on acting urgently to reduce the emissions, which gave the Court reasons to rely on those positive obligations under the ECHR to adjudge the case.
Also this decision represents a landmark in climate case litigation, as, for the first time, a court determined the responsibilities of an individual state instead of addressing responsibilities to various actors.
A peculiarity of the case of Milieudefensie et al. v. Shell compared to the Urgenda Foundation v. State of the Netherlands, is that the defendant is not the state but a private entity.
Therefore, this case represents a turning point as for the first time a judge has ordered a large polluting corporation to comply with the Paris climate agreement.