ClientEarth launches legal action against Shell over net zero failings
Shareholder activism group ClientEarth launched legal action against energy giant Shell yesterday over failure to properly prepare for the net zero transition, claiming the firm’s inaction is risking jobs and damaging the planet.
ClientEarth attacked Shell’s board in a statement yesterday, claiming it had failed in its duty to align the firm with the goals of the Paris Agreement despite being ordered last year to slash its emissions by 45 per cent, in a landmark ruling from a Dutch court.
The group has now laid out plans to take derivative action against Shell in the UK to claim that the board’s actions fail to live up to its words.
“Shell publicly maintains that its strategy is consistent with the 1.5°C temperature goal of the Paris Agreement, and has set a target to become a net zero emission energy business by 2050, in step with society,” the group said in a statement.
“But its interim targets to get there simply don’t add up. Analyst research last year suggested that, far from a 45 per cent reduction, Shell’s strategy would in fact result in a 4 per cent rise in net emissions by 2030, and that the company was unlikely to meet even its own targets.”
ClientEarth said Shell bosses’ “wait and see” approach to the net zero transition risked coming jeopardising the long-term viability of the firm and the interests of shareholders and employees.
The action from ClientEarth comes after Shell has weathered a storm of criticism from investors over its slow action on the energy transition.
Notorious activist investor Dan Loeb built up a $750m stake in the firm via his fund Third Point and has been agitating for a break up of the firm to speed up its transition away from fossil fuels.
In a letter to his investors last year, Loeb accused bosses of trying to be “all things to all people”.
“In trying to do so, Shell has ended up with unhappy shareholders who have been starved of returns and an unhappy society that wants to see Shell do more to decarbonize,” he wrote.
In its annual report yesterday, Shell also confirmed it was phasing out its Russia operations entirely and not renew contracts it has for supplies from the country.