ClientEarth shareholder litigation against Shell’s Board FAQs

ClientEarth is pursuing a 'world-first' derivative action against Shell's Board of Directors, arguing that the Board has breached its legal duties under the UK Companies Act by failing to properly prepare the company for the net zero transition. ClientEarth asserts that Shell's current climate strategy is insufficient, noting that its net zero target is not reflected in budgets and that its 'Energy Transition Strategy' focuses on 'carbon intensity' rather than absolute emissions reductions. The litigation seeks to compel the Board to align Shell's strategy with the Paris Agreement to protect the company's long-term commercial viability.

• ClientEarth argues that Shell's Board is mismanaging material climate risks, including physical threats to infrastructure like offshore drilling platforms and refineries in coastal areas, as well as transition risks that could lead to 'massive writedowns' of assets.
• The document identifies several failures in Shell's climate strategy: the net zero target is not integrated into operating plans or budgets, the 'Energy Transition Strategy' targets 'carbon intensity' rather than absolute emissions, and the 50% Scope 1 and 2 reduction target covers only about 5% of total emissions.
• Analysis from September 2021 suggests that Shell's flagship strategy would lead to a 4.4% increase in net emissions by 2030, contradicting the International Energy Agency's requirements for limiting warming to 1.5°C.
• The legal claim is based on Section 172 of the UK Companies Act, which requires directors to promote the success of the company while considering long-term consequences and environmental impact.
• This case is described as a 'world-first' because it is the first attempt to hold a company's Board of Directors personally liable for failing to prepare for the net zero transition.

APA

ClientEarth (2022). ClientEarth shareholder litigation against Shell’s Board FAQs. https://www.clientearth.org/media/puojyzvy/clientearth-shareholder-litigation-against-shell-s-board-faqs.pdf

Chicago

ClientEarth. ClientEarth shareholder litigation against Shell’s Board FAQs. 2022. https://www.clientearth.org/media/puojyzvy/clientearth-shareholder-litigation-against-shell-s-board-faqs.pdf.

Wikipedia

{{cite report |author=ClientEarth |title=ClientEarth shareholder litigation against Shell’s Board FAQs |date=March 2022 |url=https://www.clientearth.org/media/puojyzvy/clientearth-shareholder-litigation-against-shell-s-board-faqs.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clientearth2022clientearth, author = {{ClientEarth}}, title = {{ClientEarth shareholder litigation against Shell’s Board FAQs}}, institution = {ClientEarth}, year = {2022}, month = mar, url = {https://www.clientearth.org/media/puojyzvy/clientearth-shareholder-litigation-against-shell-s-board-faqs.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }