Shell has been slapped with a fresh lawsuit over climate change, with activist investors accusing the company’s leadership of mismanaging company risks.
“SUITS RELATED TO CLIMATE”
In recent years, corporations have faced an increasing number of climate-related lawsuits in response to mounting demand to intensify efforts to combat global warming.
After being sued by environmental groups, a Dutch court ordered Shell in 2021 to reduce its greenhouse gas emissions by 45 percent by the end of the decade.
This time, ClientEarth, a tiny Shell stakeholder, has launched a case in the High Court of England and Wales against Shell executives “for failing to manage the material and predictable risks posed by climate change to the company.”
Shell, which last week reported record annual profits, denies the charges.
Client Earth said in a statement on Thursday that the group’s present plan “will bind the company to projects and investments that are likely to become unprofitable as the world cleans up its energy systems.”
This undermines the company’s long-term commercial viability and efforts to safeguard the environment, so increasing the company’s risk.
ClientEarth asserts that the Shell board “violated its legal obligations” by failing to create and implement an energy transition strategy consistent with the Paris Agreement.
Under the historic Paris agreement of 2015, nations agreed to achieve net-zero carbon emissions by the middle of the century in an effort to restrict the rise in global temperatures to two degrees Celsius, and preferably to 1.5C.
Also see: Shell’s record profit on rising energy costs ignites uproar
‘NO MERIT’
Shell responded by stating that it “does not accept ClientEarth’s allegations” and that the claims “lack merit.”
“We believe that our climate targets are aligned with the more ambitious objective of the Paris Agreement, which is to limit the increase in the global average temperature to 1.5 degrees Celsius above pre-industrial levels,” the statement continued.
The environmental lobby as a whole criticizes the firm’s net-zero aspirations, accusing it of “greenwashing,” or portraying a corporation as excessively eco-friendly.
ClientEarth stated that institutional investors holding more than 12 million shares supported their legal action.
Shell emphasized that these investors were not claimants but had given letters of support to ClientEarth and represented less than 0.2% of their entire shareholder base.
ClientEarth possessed a “very small” number of Shell shares, the company said.
The lawsuit was filed on Thursday, one week after Shell reported a remarkable $42.3 billion annual net profit due to rising oil and gas prices.
Shell examines its energy businesses in the United Kingdom, Germany, and the Netherlands.
Fueled by Russia’s largest oil producer’s invasion of Ukraine, the post-tax total was more than double that of 2021.
As the globe scrambles to establish a net-zero emissions economy by 2050, the energy sector is under increasing pressure to intensify its efforts to transition away from fossil fuels.
Tuesday, the British oil giant BP decreased its goal for reducing carbon emissions.
»Shell directors are sued by a shareholder over climate risks«