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ClientEarth Challenges UK Court Dismissal of Shell Climate Lawsuit

By Kirstin Ridley | May 19, 2023
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ClientEarth, an environmental law charity turned activist Shell investor, said on Friday it was challenging a London court decision to dismiss its novel lawsuit against the energy giant’s board over alleged climate risk mismanagement.

The group said it would ask the High Court to reconsider the decision at an oral hearing about the case – the first notable investor lawsuit against directors over the alleged failure to properly prepare for a shift from fossil fuels.

If judges allow the action to proceed, it could encourage investors in other companies, including in those funding carbon emitters, to litigate against boards that fail to adequately manage climate-related risks, lawyers have said.

Shell, which has increased spending on renewable energy and low-carbon technologies, said the claim was “utterly misconceived” and that it ignored how directors of complex businesses had to balance competing considerations.

“We remain confident that permission to bring the claim should not be granted and that the court will stand by its ruling,” a spokesperson said.

A High Court judge last Friday noted that investor support for Shell’s energy transition strategy was 80% last year.

The company could, however, face a more challenging annual meeting this year.

A group of European institutional Shell investors, which owns about 12 million of Shell’s 7 billion shares, has written letters of support for the case.

“This claim is about Shell’s board adopting a strategy that is fit to manage the serious and significant climate risks facing the company – in line with its legal duties,” Paul Benson, ClientEarth’s senior lawyer, said.

ClientEarth alleges Shell’s 11 directors have failed to manage the “material and foreseeable” risks climate change poses the company – and that they are breaking company law.

It is seeking a court order requiring the board to adopt a transition strategy aligned with the Paris climate agreement on curbing global warming, and its duties under the UK Companies Act.

No date for the court hearing was immediately available.

Copyright 2025 Reuters. Click for restrictions.

Topics Lawsuits

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Written By Kirstin Ridley

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  • Categories: International & Reinsurance NewsTopics: ClientEarth, climate change lawsuits, climate lawsuits, climate risk management, Directors & Officers, environmental social and governance (ESG) criteria, Shell
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