Shareholder sues Shell bosses over climate risks
Source: AFP
British energy giant Shell has been hit with a new lawsuit over climate change, with activist investors accusing the company's leadership of mismanaging risks to the company.
Corporations have faced a growing number of climate-related lawsuits in recent years as they come under pressure to step up efforts to curb global warming.
Shell was already ordered by a Dutch court in 2021 to slash its greenhouse gas emissions by 45 percent by the end of the decade after it was sued by environmental groups.
This time, ClientEarth, a minor Shell shareholder, has filed a lawsuit in the High Court of England and Wales against Shell bosses "for failing to manage the material and foreseeable risks posed to the company by climate change".
Shell, which reported recorded annual profits last week, denies the allegations.
The group's current plan "will tie the company to projects and investments that are likely to become unprofitable as the world cleans up its energy systems", Client Earth said in a statement on Thursday.
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"That puts the company's long-term commercial viability at risk, and also threatens efforts to protect the planet, further increasing the risk to the company."
ClientEarth alleges the Shell board "breached legal duties" by "failing to adopt and implement an energy transition strategy that aligns with the Paris Agreement".
Under the landmark 2015 Paris deal, nations pledged to reach net-zero carbon emissions by the middle of the century to try and limit the increase in global temperatures to two degrees Celsius, and preferably to 1.5C.
'No merit'
Shell said in response that it does "not accept ClientEarth's allegations", insisting the claims had "no merit".
"We believe our climate targets are aligned with the more ambitious goal of the Paris Agreement: to limit the increase in the global average temperature to 1.5 degrees celsius above pre-industrial levels," it added in a separate statement.
The giant is facing criticism over its net-zero plans from the wider environmental lobby, which accuses it of "greenwashing", or marketing a company as overly climate-friendly.
ClientEarth said its legal action had the support of institutional investors holding more than 12 million shares.
Shell stressed such investors were not claimants but had sent ClientEarth letters of support, and accounted for less than 0.2 percent of its total shareholder base.
It added that ClientEarth held a "very small" number of Shell shares.
Thursday's legal claim was lodged one week after Shell posted spectacular annual net profit of $42.3 billion thanks to surging oil and gas prices.
The post-tax figure, fuelled by the invasion of Ukraine by major energy producer Russia, was more than double the amount achieved in 2021.
The energy sector has faced growing calls to step up efforts to transition away from fossil fuels as the world scrambles to become a net-zero emissions economy by 2050.
But British oil giant BP on Tuesday reduced its target for cutting carbon emissions after reporting that its underlying profit had more than doubled last year to $27.7 billion.
Source: AFP
