Our thinking

Is there a silver lining in Shell’s win?

15 November, 2024

The Hague Court of Appeal has overturned a 2021 ruling that required Shell to cut its CO2 emissions by 45% by 2030 compared to 2019 levels. Not great news. But there are reasons to think big oil shouldn’t rush to celebrate Shell’s court win.

As Donald Pols, the director of Milieudefensie, the Dutch arm of Friends of the Earth, which brought the case to court said: “This hurts. But at the same time, this case has ensured that major polluters are not immune and has further fuelled the debate about their responsibility in combating dangerous climate change.”

We see this mixed picture in the rulings. The judges balked at mandating specific reduction targets, citing a lack of scientific consensus on individual company obligations. And they also gave their backing to Shell’s argument that targeting a single company would be ineffective, as other suppliers would fill the demand for fossil fuels.

However, the court reinforced the principle that Shell has an obligation to counter dangerous climate change by reducing its emissions. This crucially important acknowledgment, coupled with the court’s assertion that it can, in principle, mandate absolute emission reductions for companies, suggests that corporate climate accountability is becoming increasingly inevitable, even if we are not there yet.

This also comes at a time of mounting pressure from countries, states and environmental organisations, coupled with the fact that New EU rules, including the directives on carbon trade, CSRD and CSDDD, require Shell to develop and implement transition plans.

The march towards change continues, and despite this ruling, as cases continue to unfold, the courts are likely to pay an ever more important part.

By Emma Alajarin