Shell welcomes Dutch court’s decision to overturn landmark climate ruling
The Court of Appeal in the Hague overturned the 2021 ruling in the case brought by the Netherlands arm of Friends of the Earth (Milieudefensie) and other campaigners.
Reacting to the ruling on Tuesday, Shell’s chief executive officer Wael Sawan said: “We are pleased with the court’s decision, which we believe is the right one for the global energy transition, the Netherlands and our company.”
Shell’s target to become a net zero emissions energy business by 2050 “remains at the heart” of its strategy and is transforming the business, he said.
The ruling, which can now be appealed to the Dutch Supreme Court, comes as the Cop29 UN climate conference entered its second day in Azerbaijan.
Green activists called the decision a “setback” for the battle against climate action, but have vowed to fight on.
The original district court ruling ordered Shell to reduce its net carbon emissions across its operations and from the products it sells, applying Dutch duty of care and international human rights laws to the company, over and above its corporate requirements.
This meant the company would be legally obliged to significantly reduce the exploration of new oil and gas operations – something that the oil and gas giant previously pledged to do but is now facing pressure for backtracking on.
Shell argued that this legal obligation would do little to reduce emissions, as customers would take their business elsewhere.
After the judgment on Tuesday, Donald Pols, director of Milieudefensie, said: “This ruling affects us deeply. It is a setback for us, the climate movement and millions of people around the world who are worried.
“But anyone who knows us a little knows that we never give up. We will emerge stronger together from this too.”
He added the judge’s ruling that Shell remains responsible for reducing emissions and that companies must respect human rights was “encouraging”.
Greenpeace UK campaigner Philip Evans equally called the decision a “setback for people everywhere dealing with the climate chaos fuelled by Shell’s reckless polluting”.
“But around the world, the fossil fuel industry is facing a tidal wave of lawsuits and legal challenges to hold them accountable for their role in the climate crisis,” he said.
He cited the case in Scotland where a judge is set to decide on whether to allow Shell to continue two UK oil and gas projects in the North Sea – Jackdaw and Rosebank.
“Whether in the courts or in the streets, Greenpeace and the global climate movement will keep fighting until Shell and the rest of the industry stops drilling and starts paying for the damage they are doing to people and the planet,” he said.
In terms of what the ruling could mean for investors, Derren Nathan, head of equity research at Hargreaves Lansdown, said: “There’s no doubt that financial returns have been the key focus of Shell’s strategic direction and investment spend in recent times.
“That’s gone down pretty well with shareholders of late, despite the longer-term viability questions raised by reduced emissions targets.
“However, that doesn’t mean Shell is ignoring the energy transition entirely,” he added, adding that it is investing billions into the transition.
But Mr Nathan also noted that Shell’s investment this year is set to come in lower than expected, adding: “If this proves to be part of a wider pullback, it could raise some questions over Shell’s longer-term growth prospects.”
