UK courts have put an end to a case brought against Shell on allegations the oil major’s directors were failing their shareholders for not appropriately managing climate change related risk.
On Tuesday, the Court of Appeal has reiterated its refusal to admit a lawsuit from climate campaign group ClientEarth against Shell, which the campaigner first deposited earlier this year.
Motivating its decision, the court wrote: “The appeal would have no real prospect of success and there is no other compelling reason for this Court to hear.”
ClientEarth first took court action against Shell’s board in February, claiming directors had failed to align the company with climate change agreements agreed under the Paris 2015 objectives and was thus in breach of its legal duties to shareholders.
The High Court in London first dismissed the claim in May, and the judge maintained his decision in July. The court of Appeal has confirmed the refusal to appeal on Tuesday this week.
This latest dismissal brings the case to an end.
“The Courts have missed a critical opportunity to grapple with the enormity of the climate crisis, and clarify directors’ legal duties in light of the significant risks it presents to companies and shareholder value,” said Paul Benson, ClientEarth senior lawyer.
ClientEarth had been seeking to establish a legal precedent with a derivative action, whereby personal liability could hold senior management of the oil major accountable for mismanagement of climate risk on the part of the company.
The claim alleged that Shell, by not implementing an anergy transition strategy aligned with the goals of the Paris Agreement on climate, was running contrary to its responsibilities towards its investors.
ClientEarth said the court “did not engage with the merits” of the evidence presented by the group or “its central argument that the directors are mismanaging the climate risks” the company is facing.
In comments to the court decision, the judge wrote that evidence presented “falls some way short of establishing” that Shell’s directors were not acting in the best interests of shareholders.
A Shell spokesperson said the claim was “a misuse of the court’s time and resources”, adding: “We believe our directors have always complied with their duties and acted in the company’s best interest.”
The oil major had previously described the claim as “fundamentally flawed”.
Last week, Shell took action against Greenpeace, seeking up to $8.6 million in damages, after activists from the group boarded a Shell vessel in the North Sea earlier this year.
