Shell, convicted by Dutch court for climate negligence
In a landmark ruling on 26 May 2021, the Hague Tribunal ordered Shell to reduce its emissions by 45% by 2030.
The organisation Milieudefensie, together with six other NGOs and 17,379 citizens, had filed a lawsuit against Shell in April 2019 to order it to reduce its greenhouse gas emissions after a formal notice had not been served. The plaintiffs believed that the oil company's policy did not guarantee any reduction in emissions and contributed to exceeding the 2°C threshold, 1.5°C ideally not to be exceeded to avoid dangerous global warming, as stated in the Paris Agreement, the United Nations Framework Convention on Climate Change and the IPCC reports.
In particular, the Court of First Instance declared the associations' action admissible, with the exception of Action Aid, as it did not defend the interests of Dutch residents sufficiently for its collective claim to be admissible. The action of the individual applicants was also not considered admissible by the Court of First Instance, as they did not have a sufficiently concrete individual interest (point 4.2 of the judgment).
Under section 4.4 entitled "RDS's duty to mitigate", the Tribunal states very quickly that it follows from the "standard of care that, in determining Shell's corporate policy, RDS ("Royal Dutch Shell") must observe the due diligence exercised in the company". In interpreting the unwritten standard of care, the Tribunal included :
(1.) the policy-setting position of RDS in the Shell group,
(2.) the Shell group’s CO2 emissions, (3.) the consequences of the CO2 emissions for the Netherlands and the Wadden region,
(4.) the right to life and the right to respect for private and family life of Dutch residents and the inhabitants of the Wadden region,
(5.) the UN Guiding Principles,
(6.) RDS’ check and influence of the CO2 emissions of the Shell group and its business relations,
(7.) what is needed to prevent dangerous climate change,
(8.) possible reduction pathways,
(9.) the twin challenge of curbing dangerous climate change and meeting the growing global population energy demand,
(10.) the ETS system and other ‘cap and trade’ emission systems that apply elsewhere in the world, permits and current obligations of the Shell group,
(11.) the effectiveness of the reduction obligation,
(12.) the responsibility of states and society,
(13.) the onerousness for RDS and the Shell group to meet the reduction obligation, and
(14.) the proportionality of RDS’ reduction obligation.
There are some interesting extracts of the judgment, and for the rest we refer you to the official English translation, to the original Dutch judgment, or to the free translation in French published on our website:
« From the Urgenda ruling it can be deduced that Articles 2 and 8 ECHR offer protection against the consequences of dangerous climate change due to Co2 emissions induced global warming. (…) The serious and irreversible consequences of dangerous climate change in the Netherlands and the Wadden region, as discussed under (4.4. (3)), pose a threat to the human rights of Dutch residents and the inhabitants of the Wadden region » (point 4.4.10 of the judgment) ;
« The responsibility of business enterprises to respect human rights, as formulated in the UNGP, is a global standard of expected conduct for all business enterprises wherever they operate » (point 4.4.13 of the judgment) ;
« The court is of the opinion that much may be expected of RDS. RDS heads the Shell group, which consists of about 1,100 companies, and operates in 160 countries all over the world. It has a policy-setting position in the Shell group (see 4.4 (1.)), which is a major player on the worldwide market of fossil fuels and is responsible for significant CO2 emissions, which exceed the emissions of many states and which contributes towards global warming and a dangerous climate change in the Netherlands and in the Wadden region (see 4.4 (2.)) with serious and irreversible consequences and risks for the human rights of Dutch residents and the inhabitants of the Wadden region (see 4.4 (3.) and (4.)) » (point 4.4.16 of the judgment) ;
The non-binding goals of the Paris Agreement represent a universally endorsed and accepted standard that protects the common interest of preventing dangerous climate change. The court follows this reasoning in its interpretation of the unwritten standard of care. The court assumes that it is generally accepted that global warming must be kept well below 2ºC in 2100, and that a temperature rise of under 1.5ºC should be strived for » (point 4.4.27 of the judgment) ;
« At unchanged emission levels, the carbon budget will have been used up within twelve years.(…) The sooner reductions are started, the more time is available before the remaining carbon budget runs out. » (point 4.4.28 of the judgment) ;
« RDS argues that the reduction obligation will have no effect, or even be counterproductive, because the place of the Shell group will be taken by competitors. (…) After all, each reduction means that there is more room in the carbon budget. The court acknowledges that RDS cannot solve this global problem on its own. 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» (point 4.4.49 of the judgment) ;
« The reduction obligation requires a change of policy, which will require an adjustment of the Shell group’s energy package (see legal ground 4.4.25). This could curb the potential growth of the Shell group. However, the interest served with the reduction obligation outweighs the Shell group’s commercial interests, which for their part are served with an uncurtailed preservation or even growth of these activities. Due to the serious threats and risks to the human rights of Dutch residents and the inhabitants of the Wadden region, private companies such as RDS may also be required to take drastic measures and make financial sacrifices to limit CO2 emissions to prevent dangerous climate change.» (point 4.4.53 of the judgment) ;
In conclusion, the Tribunal finds that « RDS is obliged to reduce the CO2 emissions of the Shell group’s activities by net 45% at end 2030, relative to 2019, through the Shell group’s corporate policy.» (point 4.4.55 of the judgment).
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