Climate change poses massive human rights threats to communities around the world. The scientific community warns that without a drastic change in course, global temperatures will rise more than 1.5 degrees Celsius above pre-industrial levels, with catastrophic impacts. While 100 companies are responsible for nearly three-fourths of global emissions contributing to climate change, governments have historically lacked the tools--or political will-- to effectively mitigate corporate contributions to climate change, even those that fossil fuel companies make.
However, a new ruling by a Dutch court may force change for corporate accountability on climate change, or at least for one of the fossil fuel industry’s biggest players.
The post begins by discussing the parties involved in the case and the nature of the litigation. It then summarizes the verdict. Finally, it addresses the potential ramifications of the historic decision.
The Case
The case was brought by several non-governmental environmental organizations, including Friends of the Earth, and over seventeen thousand individual claimants against Royal Dutch Shell (Shell) and a group of companies under Shell’s control, referred to as the Shell group. The case was brought in a Dutch court, since Shell is headquartered in the Netherlands.
The claimants allege that based on Dutch law, Shell owes the claimants a standard of care and their current business practices, primarily how much carbon dioxide it emits, violates that standard of care. Shell claimed that it already had a plan in place to reduce its net carbon emissions to zero by 2050 that is in line with the goals of the Paris Climate Agreement. However, the claimants argued that Shell’s plan was inconsistent with global climate standards and that they should be forced to reduce their total CO2 emissions by 45% (based on 2019 levels) by 2030.
The Verdict
In a judgment issued on May 26, 2021, the Hague District Court sided with the claimants and ruled that Shell must reduce its carbon emissions by 45% of its 2019 levels by 2030. This ruling also applies to all entities in the Shell group.
The court held that Shell’s actions did violate a standard of care, according to Dutch law, and that standard of care was based upon United Nations Guiding Principles on Business and Human Rights (UNGPs), the Paris Climate Agreement, and other international norms. In fact, it was the Paris Climate Agreement, of which the Netherlands is a signatory, that the court used in determining the 45% reduction of CO2 emissions by 2030, which is all the more surprising given that the Paris Climate Agreement is not binding on its signatories. Additionally, the court, in its ruling, linked climate change with human rights issues, which comes as a welcomed change among human rights and environmental activists.
The Upshot
While Shell has stated that it will appeal the court’s ruling, the historic value of this verdict for climate justice advocates cannot be understated. In coming to its ruling, the court cited numerous internationally recognized environmental norms (such as the Paris Climate Agreement, the UN Climate Convention, the Intergovernmental Panel on Climate Change) as evidence that there was an uncodified standard of care that Shell owed to the claimants and Shell’s contribution to greenhouse gas emissions violates that standard. Not only does this force Shell to comply with the Paris Climate Agreement, but it could pave the way for other fossil fuel-based energy producers to be held to the same or similar standards. Similarly, citing international agreements, regardless of their binding effect, as norms which can create standards of care could open companies to a host of new lawsuits.
However, this ruling is limited to the Netherlands, so defendants may not be easy to find and other jurisdictions may not be as willing to link international non-binding agreements to standards of care or even have the right statutory language to allow for such a suit. Ultimately, time will tell exactly how historic this decision is, but for now, it is at least a step in the right direction.
Sameeul Haque is a Staff Attorney at the Corporate Accountability Lab.
