ClientEarth legal appeal against Shell board of directors dismissed

A UK court has refused to hear an appeal from campaign group ClientEarth over its lawsuit against Shell’s board of directors concerning the company’s climate plans.

ClientEarth, a shareholder of Shell (LON: SHEL), had argued the Companies Act legally required directors to implement plans aligned with the Paris Agreement.

The High Court had already twice ruled against ClientEarth earlier this year in May and again in July, and the decision by the Court of Appeal not to hear the case has put an end to the legal challenge.

ClientEarth senior lawyer Paul Benson said the group was “deeply disappointed” with the decision, calling it “misguided and wrong”.

Meanwhile, Shell spokesperson told Energy Voice: “From the start, this claim was a misuse of the court’s time and resources, and not an effective way to tackle climate change.

“We believe our directors have always complied with their duties and acted in the company’s best interest.

© Supplied by Shell

“The world needs wide-ranging solutions – not judgments against one company – to make a real impact on climate change while ensuring a sustainable and fair energy transition for society as a whole.

“By working together, we can more meaningfully work to shift consumer demand to lower carbon products and develop the infrastructure and technology needed for the energy transition.”

Shell given ‘free pass’

Responding to the decision, Mr Benson said: “The Courts have missed a critical opportunity to grapple with the enormity of the climate crisis, and clarify directors’ legal duties in light of the significant risks it presents to companies and shareholder value.

“It is astonishing that the Court has refused to engage with detailed evidence as to the Board’s failings, and dismissed out of hand the support from major institutional investors with more than 12 million shares in the company.

“No doubt Shell will say that this decision vindicates its Board’s direction, but the reality is that by failing to grapple with the issues, or even hear our appeal, the Court has given Shell a ‘free pass’.”

© Shell

ClientEarth said the case had failed due to procedural objections raised by the Court, including the notion that, as an environmental legal organisation, ClientEarth could not be acting in the best interests of the company.

The campaign group argued that in this instance, the interests of Shell and its shareholders were “aligned with those of the planet”.

“We are undeterred by this decision, and will keep fighting for accountability from people in the driving seat of companies steering further into climate catastrophe,” Mr Benson said.

“It is companies like Shell that are most exposed to climate risk and which have the most to lose from their directors chasing short-term wins over long-term prosperity.”

Shell climate ambitions questioned

Shell has received criticism after rolling back its green energy ambitions following chief executive officer Wael Sawan taking up the top job at the firm earlier this year.

Mr Sawan said his firm will not “pretend to lead” on areas of the energy transition that it does not already have a foothold in.

The UK-listed supermajor also announced it was cutting 200 jobs from its low carbon hydrogen business.

The company has also weathered criticism from within over its strategic choices.

It was reported in September that an open letter, published on Shell’s internal site by two employees, raised concerns about the shift in business strategy.