Shell wins appeal against climate ruling to reduce emissions – but climate litigation grows stronger & businesses must sharpen up their acts
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Since 1854, Shell – one of the world’s leading oil and gas companies – has emitted 36,528 million tons of carbon dioxide – contributing to 2.1 per cent of global emissions.
Back in 2021, a Dutch court ordered the oil and gas giant to sharply reduce its greenhouse gas emissions by 45 per cent by 2030 – the first ruling of its kind in the world against a company.
The sheer breadth of the court order – not just covering Shell’s business but throughout its entire chain, all the way to emissions from cars burning the company’s petrol – was a landmark ruling that appeared to mark the advent of a new era in tackling climate change: one in which companies could no longer hide their damage to the planet behind the behaviour of their consumers.
Finally, it seemed that times were changing: it was up to major companies to change their ways, fundamentally altering products and business models to reduce the emissions of users.
But with the recent news that Shell won its appeal, some have expressed concern over what this might mean for the future of tackling the climate crisis, and the potential precedent it may set for other big players on the oil and gas scene.
The latest judgement given earlier this week now states Shell is ‘responsible’ for reducing its CO2 emissions – but by no quantifiable amount, and with no legal obligation. This leaves a sizeable, interpretative gap which Friends of the Earth director Donald Pols calls a ‘setback for [the environmental organisation], for the climate movement and for millions of people around the world.’
Against the backdrop of COP29, the news that one of the major contributors to global emissions is loosening up on climate pledges appears to be a huge reversal in the progress being made to combat global warming.
But is the win truly a win for Shell – or will big oil and gas companies continue to face increasing pressure to change their ways?
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Climate litigation fights back
Although Shell won its appeal this time round, the tide is turning in holding not just governments, but businesses, accountable for how their actions impact our climate.
Historically, most climate-aligned lawsuits were made against governments. But as of 2023, the world – excluding the US – saw 40 per cent of all climate-related cases being targeted at companies. In the US, still just 15 per cent of cases are filed toward companies.
So vast is the uptick in these climate-aligned lawsuits that around 230 have been made against corporations and trade associations since 2015. The biggest number was recorded in the US, with 129 cases, followed by the UK (24), Brazil (10), Germany (7) and Australia (6).
The global south are now seeing an increase in the number of climate litigation cases too, with Panama and Portugal reporting their first climate cases last year, showing how accountability not only for governments but corporations is growing in strength and numbers.
Cases filed for climate-washing – a form of green-washing in which a body misrepresents its progress toward climate goals – have seen growth recently too. These cases are largely successful. More than 70 per cent of climate-washing lawsuits decide in favour of the claimant.
Even Shell faced the repercussions of climate-washing earlier this year, with several of its adverts banned by the UK’s Advertising Standards Agency after allegedly misleading the public into thinking the company invested predominately in electric vehicle charging infrastructure and clean electricity. In reality, Shell still gets the majority of its income from oil and gas.
So, yes, Shell did win their appeal earlier this week – but it’s undeniable that it is becoming more difficult for companies to avoid being scrutinised by countries, organisations and individuals alike in terms of their impact of the climate.
Only last year, the state of California filed a climate lawsuit against companies including Shell, BP, ExxonMobil and Chevron – as well as the American Petroleum Institute – over claims these companies misled the public for decades on the dangers of fossil fuels and their impact on climate change
California’s full lawsuit to these companies covers 135 pages, but its main argument details that big companies were aware as early as the 1960s that greenhouse gases would cause planetary warming and lead to damage.
One such example of early awareness of the effects of climate change is that at ExxonMobil – the largest US-based oil and gas business. Back in 1977, the company’s own scientists had reportedly begun warning officials that carbon emissions from fossil fuels were warming the planet. Yet ExxonMobil funded a campaign stretching for more than 30 years which sought to ‘cast doubt’ on human-driven climate change.
Since California has faced extreme weather events in recent years, thanks to the rising temperatures on the planet, the lawsuit made by the state demanded these major players in oil and gas help fund recovery efforts from droughts, wildfires and other similar events.
‘Whether it’s fires, droughts, extreme heat, or sea-level rise, Californians have been living in a climate emergency caused by the fossil fuel industry, and now the state is taking decisive action to make those polluters pay,’ said president of the Center for Climate Integrity Richard Wiles.
And it isn’t the only US state to take action against some of the biggest polluters of the planet. Since 2017, eight states, 36 municipalities as well as the District of Columbia have officially sued oil companies for hiding the true environmental cost of using their products. And considering just 57 companies – all of which are in the oil, gas, cement and coal sectors – have been linked to 80 per cent of greenhouse gases produced in the last eight years, it is no wonder that the true impact of their business models is being opposed.
In light of all these lawsuits, Shell ‘do not believe the courtroom is the right venue to address climate change’, but instead the issue is better tackled through collaborative work catalysed by government policy, according to spokesperson Anna Arata.
Ultimately, although the recent overturned ruling may signal to Shell – and other high emitters – that they are safe from the international frameworks that govern countries, such as the Paris Agreement and the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR), environmental groups such as Friends of the Earth Netherlands may still elevate the case to the Supreme Court if they wish, says ESG analyst at Hargreaves Lansdown, Joshua Sherrard-Bewhay.
For Shell, then, returning to the courtroom may be a situation they cannot avoid.
Looking to the future
The fact that Shell has much more ambiguous emissions targets in the wake of their appeal win doesn’t concretely mean the planet is headed toward a future slicked with fossil fuels. In fact, growing pressures to change may prove otherwise.
With climate ligation and lawsuits amping up, these companies must respond to an ever-growing body of evidence that suggests their products and manufacturing processes do not align with the scientifically best priorities for our planet: limiting global warming to 1.5C above pre-industrial levels.
As Professor of Climatology at UCL Mark Maslin says, it is a matter of ‘when – not if – fossil fuels cease to be used as an energy source.’
So while Shell’s win may feel like a setback in the fight against climate change to environmental groups, the mounting pressure from countries, states and environmental organisations is beginning to push major world businesses to a turning point. More than ever, the impact of big oil – and other major corporations – is well-understood and is being actively fought against for change. Evading the consequences of such actions can be a temporary fix, but not a strategy for the long haul, as explained by Friends of the Earth International.
‘No matter what, people are rising up and the era of corporate impunity is coming to an end,’ said Friends of the Earth International spokesperson Kirtana Chandrasekaran. ‘We urgently need an end to fossil fuels, no loopholes from carbon markets and false solutions and for big polluters to pay up.’
