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Shell directors personally sued over ‘flawed’ climate strategy

Shell board of directors is being sued personally for allegedly failing to effectively manage the risks associated with the climate emergency, in a first-of-its-kind complaint that could have far-reaching repercussions for how other firms seek to reduce emissions.

ClientEarth, an environmental legal company, launched the action against the British oil major’s board on Thursday in the High Court of England and Wales in its position as a shareholder.

Investors File Lawsuit Against Shell Company

It claims that 11 members of Shell’s board of directors are mismanaging climate risk and violating corporate law by neglecting to develop an energy transition strategy in accordance with the landmark 2015 Paris Agreement.

The claim, which has the support of institutional investors who own more than 12 million shares of the company, is thought to be the first in the world to hold a board of directors accountable for failing to properly prepare for the energy transition.

In its capacity as a shareholder, ClientEarth filed the first climate litigation of its sort in the High Court of England and Wales.

The legal action is also supported by institutional investors and pension funds, which collectively possess over 12 million of Shell’s 7 billion shares. Pension funds such as Nest, the UK’s largest occupational pension scheme, and London CIV in the UK, as well as Swedish state pension fund AP3, are among these investors.

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Energy Transition Strategy

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Shell board of directors is being sued personally for allegedly failing to effectively manage the risks associated with the climate emergency.

Shell claims that its ‘Energy Transition Strategy,’ which includes a target of being net zero by 2050, is consistent with the Paris Agreement’s 1.5C temperature objective. The corporation also claims its objective to halve emissions by 2030 is “industry-leading”.

However, ClientEarth claims that this represents less than 10% of its total emissions, and independent evaluations have revealed that Shell’s climate plan is not in line with the Paris Agreement.

The environmental law organization is asking the high court to require Shell to implement a climate risk management strategy that meets with a 2021 legal order by Dutch courts to reduce emissions by 45 percent.

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