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2021 Business responsibility Domestic court Emissions reductions The Netherlands

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.

Date:

26 May 2021

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.

Remedies:

The judgment is subject to appeal, but the court rendered it provisionally enforceable, despite noting the possibility of irreversible negative consequences for Shell.

Separate opinions:

None

Measures taken as a result of the judgment:

Pending

Status of case:

Decided, appeal pending

Suggested case citation:

The Hague District Court, Milieudefensie and Others v. Royal Dutch Shell PLC and Others, case number C/09/571932, Judgment of 26 May 2021.

Links:

For the full judgment, see here.

For a summary in English, see here.

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