Climate Litigation at a Crossroads: the Overturning of the Historic Shell Judgment on Enforcement of Climate Targets

In Milieudefensie et al. v Royal Dutch Shell (2022), Shell was ordered to reduce CO₂ emissions linked to its products by 45% from 2019 levels by 2030. This decision was underpinned by climate-related human rights, duties in tort law and on an unwritten standard of care based on the goals of the Paris Agreement and the United Nations Guiding Principles on Business and Human Rights.[1]

Shell appealed the decision and on 12 November 2024 the Dutch Court of Appeal overturned the judgment.[2] The English version is available here. The reversal by the Court of Appeal marks another "bump" in a turbulent month for global climate action, following the re-election of Donald Trump as US President whose views on climate action are well known:- US climate envoy, John Podesta, warned at this month's COP29 in Baku, Azerbaijan, that “it’s clear the next administration will try to make a U-turn and reverse progress”.[3]

The Shell judgment is of particular note in that the Court acknowledged that Shell, as a large oil and gas company, has a special responsibility, but was clearly reluctant to impose responsibility for an overall 45% global emission reduction given that Shell's scope 3 emissions are spread across multiple sectors (each sector having different reduction pathways) and it was not possible to convert this global target to a mandatory target for an individual entity. The Court was clearly taken with the doubts expressed by the parties' experts as to the value of integrated assessment models (IAMs) for establishing a sectoral reduction obligation for the oil and gas industry. It seems that the expert evidence was not comparable, it was conflicting, and it was not possible to draw a sufficiently unambiguous conclusion with regard to the required reduction of emissions as a result of the combustion of oil and gas on which to base a conviction of a specific company.

This can be compared with climate litigation taken against governments. In 2019, in the case of Urgenda,[4] the Dutch State was ordered to limit GHG emissions to 25% below 1990 levels by 2020. Similarly, in the 2020 case of Friends of the Irish Environment v Ireland the Irish Supreme Court found that the Irish Government had fail to comply with the Climate Action and Low Carbon Development Act 2015. The Court found that setting out vague or aspirational policies was insufficient to deliver on Ireland's climate targets.

It is not entirely surprising that the Dutch Court has found it difficult to enforce global climate targets against individual companies. However, we would expect to continue to see significant climate litigation directed towards government policies and decisions including those of state bodies in the environmental field.

[1] Milieudefensie et al. v. Royal Dutch Shell plc., The Hague District Court, C/09/571932 / HA ZA 19-379, 25 April 2022 (Netherlands).