ClientEarth v Board of Directors of Shell

Summary:

On March 15, 2022, ClientEarth issued a press release stating that they were taking a claim against the Board of Directors of Shell under the Companies Act 172 and 174. The legal environmental charity allege that the Board of Shell have failed to implement a climate strategy that is in-keeping with the Paris Agreement goal. The Companies Act 2006 section 172 states that companies have a duty to “act in the way he considers … would be most likely to promote the success of the company.” Whilst section 174 states the “duty to exercise reasonable care, skill and diligence.” Despite Shell committing to being a net-zero company by 2050, ClientEarth's analysis of Shell’s company strategy displays them exceeding this goal considerably, going so far as to add to a rise in emissions by 2030. This is thought to be the first UK case of its kind that has taken derivate action against a board of directors for failing to consider efforts towards achieving net zero. Client Earth is currently waiting on response from Shell Board of Directors.

At Issue: Holding the Board of Directors of Shell Liable under the UK Companies Act s.172 and 174. ClientEarth UK are arguing that the board has not implemented a climate strategy that is in keeping with the Paris Agreement goal.