Milieudefensie and others v. Royal Dutch Shell PLC

Summary:

This case was brought as a class action tort suit by a group of NGOs, as well as more than 17,000 individuals represented by Milieudefensie. The applicants claimed that Royal Dutch Shell had an obligation to reduce its carbon emissions relative to 2019 levels by 2030 across its entire energy portfolio. It represents a groundbreaking advance in the context of business responsibility for human rights impacts. A Dutch district court issued a historic decision, ordering Shell to sharply reduce its CO2 emissions, aligning with the Paris Agreement’s goal of limiting global warming to well below 2°C above pre-industrial levels. Shell appealed the judgment. The appeals court has ruled in favour of Shell, overturning the previous order requiring the company to slash its carbon emissions by 45% by 2030.

Date:

15 November 2024

Facts:

The court extensively discussed the science on climate change and its impacts, reductions targets, and the existing international instruments at length. It reiterated the reduction goals set out in the Paris Agreement.

Admissibility:

The court described the case as a public interest action. These are allowed under Dutch law, and the court noted that the common interest of preventing dangerous climate change by reducing CO2 emissions can be protected in a class action. It discussed at length whether the cases shared a ‘similar interest’, which is a requirement under the Dutch Civil Code. This requirement entails that the interests in question must be suitable for bundling into a class action so as to safeguard an the legal protection of the stakeholders.

In determining whether the individual applicants had locus standi, the court held that they had no separate interest beyond that represented by Milieudefensie before the court, and wrote off the individual claims.

Merits:

Relying on domestic law, human rights law, and soft law instruments, the domestic court interpreted the unwritten standard of care contained in Dutch domestic tort law.

Book 6, Section 162 of the Dutch Civil Code proscribes acts that conflict with what is generally accepted according to unwritten law. The court held that this standard of care also applies to Royal Dutch Shell. Applying this standard, the court held that Shell was obliged to reduce its CO2 emissions by net 45% at end 2030, relative to 2019. This reduction obligation relates to Shell’s entire energy portfolio and all of its aggregate emissions. This is an obligation of result for the activities of the Shell group itself, and a best-efforts obligation with respect to its business relations and end-users. Because Shell has the ability to influence these relations, it is expected to use its influence to bring about emissions reductions.

The Court of Appeal’s Decision:

The appeals court acknowledged that while Shell has ‘an obligation toward citizens to limits its CO2 emissions,’ it was not legally required to reduce emissions by a specific percentage such as the 45% set in the original ruling. The court cited an absence of an agreed-upon standard within climate science about the exact amount of emission reduction required for individual companies. Moreover, the court emphasised that ensuring human rights protection, including protection from climate change, is primarily up to the government. The court noted that Shell was already working to curb emissions in its production processes and argued that even if Shell halted its fuel sales, other companies might simply fill the gap to meet ongoing demand for fossil fuels, effectively resulting in no reduction in overall emissions.

Next step:

It is expected that the applicants will appeal the case to the Dutch Supreme Court.

Separate opinions:

None

Measures taken as a result of the judgment:

Pending

Status of case:

Decided

Suggested case citation:

The Hague Court of Appeal, Milieudefensie and Others v. Royal Dutch Shell PLC and Others, case number 200.302.332/01, Judgment of 12 November 2024.

Links:

For full judgments by the District Court and Appeals Court (in English), see here and here.