Climate activists used the 2015 Paris Agreement to win a Dutch court's potentially precedent-setting ruling on Wednesday that Royal Dutch Shell must cut its carbon emissions almost in half this decade.
The Hague District Court ordered the British-Dutch oil and gas multinational to make a 45% net reduction in its carbon emissions from 2019 levels by 2030. It found Shell's emissions-cutting plans fell short of its corporate responsibility. Royal Dutch Shell, or RDS, based at The Hague, Netherlands, said it planned to appeal the ruling.
"The court finds that tackling dangerous climate change is urgent," the ruling said. "The court concludes that RDS is obliged to reduce the CO2 emissions of the activities of the Shell group by 45% net by the end of 2030 compared to 2019 through the group policy of the Shell group. This reduction obligation applies to Shell's entire energy portfolio."
The ruling does not spell out how Shell must accomplish these reductions, but said "this is an important best effort obligation,where RDS can be expected to take the necessary steps to eliminate or prevent the serious risks arising from the CO2 emissions they generate and to use its influence to minimize any ongoing impacts."
Denis Pols, director of Friends of the Earth Netherlands, called it "a landmark victory for climate justice" that his organization hopes will trigger a wave of climate litigation forcing polluters to stop extracting and burning fossil fuels.
"This verdict is an enormous step forward for the international climate movement," he said. "This is also a clear signal to the other big polluters that they also have to act now."
Harry Brekelmans, Shell's projects and technology director, said in reaction to the ruling that the multinational regards climate change as an urgent matter and plans to become a "net-zero emissions company" by 2050.
“We are investing billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables and biofuels. We want to grow demand for these products and scale up our new energy businesses even more quickly," he said. “We will continue to focus on these efforts and fully expect to appeal today’s disappointing court decision.”
A 'turning point'
The ruling builds on a recent trend in finding governments must follow through on climate pledges. In 2017, the Netherlands' Supreme Court upheld a ruling that the government had to reduce greenhouse gas emissions by at least 25% below 1990 levels by the end of 2020.
Earlier this year, courts in France and Germany determined their governments were not doing enough to reduce emissions.
The ruling in the Shell case, however, represents the first time a court found a corporation liable for causing dangerous climate change, according to Friends of the Earth Netherlands, or Milieudefensie, which brought the case against Shell in 2018 along with 17,000 co-plaintiffs and six other organisations.
"This is a turning point in history," said Roger Cox, lawyer for Friends of the Earth Netherlands. "This case is unique because it is the first time a judge has ordered a large polluting company to comply with the Paris climate agreement. This ruling may also have major consequences for other big polluters."
Also Wednesday, at least two of Exxon Mobil's 12 board directors were replaced at its annual shareholder meeting with others considered friendlier to climate initiatives and cleaner energy production.
The development reflects a fast-growing theme among investors pressuring businesses to measure performance using environmental, social and governance criteria.
The Dutch court did not agree with activists' claims that Shell was failing to reduce its emissions, but ruled the U.S.-based oil and gas multinational lacked a "concrete" policy for doing its part to live up to the Paris treaty’s goal of preventing average global temperatures from rising more than 2 degrees Celsius above pre-industrial levels, or 1.5 degrees C. if possible.
In February, Shell published a strategy to more quickly roll out "net-zero emissions energy products and services, powered by growth in its customer-facing businesses." Shell said its CO2 emissions peaked in 2018, and oil production peaked in 2019, meaning they would decrease from here on out.
“Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society,” said Shell's CEO Ben van Beurden.