Insight alert: Dutch Court of Appeal upholds appeal on landmark climate litigation case against Shell

The Hague Court of Appeal (“CoA”) yesterday handed down its highly anticipated judgment in the appeal of the Milieudefensie et al. vs. Royal Dutch Shell ("Shell") case. The CoA was considering Shell’s appeal against one of the most significant climate litigation rulings in recent years, namely the 2021 ruling of the District Court of The Hague (“Court”) in which Shell was ordered to reduce its greenhouse gas emissions across its global operations by 45% by the end of 2030 as compared with 2019 levels.

Significantly, the CoA allowed Shell's appeal on the key issue, namely the specific emissions reduction which had been ordered in 2021. The CoA ruled that:

• corporate actors do have a duty of care under Dutch law to contribute to the mitigation of climate change by reducing their emissions, including as a matter of human rights law. Shell, as a major oil and gas producer, has a “special responsibility” to reduce its greenhouse gas emissions;
• however, Shell does not have an “absolute [emissions] reduction” obligation of 45%, or indeed any other specific percentage, and under EU law, it will not have such an obligation for the foreseeable future. The existence of EU regulation on climate change, including the EU Emissions Trading System and the Corporate Sustainability Due Diligence Directive, does not in itself preclude the existence of an independent duty of care under Dutch law to reduce emissions. But that regulation is relevant to determining what actions are required in order for a company to comply with that duty of care in respect of climate change;
• therefore, beyond complying with the mandatory EU regulations that applied to large companies such as Shell to reduce emissions, companies “are free to choose their own approach to reducing their emissions in the – mandatory – climate transition plan as long as it is consistent with the Paris Agreement’s climate targets”.

In our Insight available here, we discuss the background to this decision, the key findings of the CoA, and its potential significance for climate litigation against corporate actors.