Shell has appealed the court’s decision and the Board has since rebuffed parts of the verdict, indicating that it is unreasonable and essentially incompatible with Shell’s business.īut delay will only increase the risks the company faces, kicking its inevitable transition down the road. The Board’s plans also fall short of the Dutch court judgment handed to Shell in 2021, which ordered the company to cut its overall emissions by 45% by 2030 after it lost a lawsuit challenging its climate inaction. The problem is that its interim targets and strategy to get there simply don’t add up.Īnalyst research suggests that Shell’s strategy would in fact result in a reduction of just 5% in net emissions by the end of the decade. Shell publicly maintains that its strategy is consistent with the goals of the Paris Agreement (to keep global temperature rise to 1.5C), and has set a target to become a net zero emission energy business by 2050. Under UK company law, Shell’s Board has a legal duty to promote the success of the company and to act with reasonable care, skill and diligence.īut we argue the Board is breaching those requirements if it is not properly managing climate risk. We argue that putting sufficient emissions reduction targets in place in the short and medium term will secure the company’s long-term value, as well as protecting investors’ capital. The investors are concerned that the Board’s strategy does not reduce the company’s emissions fast enough. The case has already received support from institutional investors who together hold over 12 million shares in the company, including, among others, UK pension funds Nest and London CIV, Swedish national pension fund AP3, French asset manager Sanso IS, Degroof Petercam Asset Management (DPAM) in Belgium, as well as Danske Bank Asset Management and pension funds Danica Pension and AP Pension in Denmark. This will be the first time ever that a company’s board has been challenged in court on its failure to properly prepare for the energy transition. We’re bringing this case as a shareholder in the company and are asking the court to order the Board to strengthen Shell’s climate plans. How are we bringing a case against Shell’s Board? We believe this puts Shell’s Board in breach of its legal duties under the UK Companies Act to manage the climate risk facing the company.Īre you an investor in Shell? Find out what this case means for you The future consequences of Shell’s flawed climate plans could cause the company’s value to plummet, costing jobs and running the risk of shareholders and investors losing significant amounts of money, including people’s pension funds. ![]() That puts the company’s long-term commercial viability at risk, and also threatens efforts to protect the planet, further increasing the risk to the company. This will tie the company to projects and investments that are likely to become unprofitable as the world cleans up its energy systems. ![]() Why? It fails to deliver the reduction in emissions that is needed to keep global climate goals within reach and continues with fossil fuel production for decades to come. Shell’s Board is legally required to manage risks to the company that could harm its future success, and the climate crisis presents the biggest risk of them all.Įnsuring the company stays competitive in the energy markets of the future, as countries and customers worldwide choose cheaper, cleaner energy, means Shell needs to move away from fossil fuels towards an alternative business model.īut we’re arguing that the plan Shell’s Board currently has for making that shift is simply unreasonable. Why do we think the actions of Shell’s Board are unlawful?
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