The 2021 mandate had required Shell to cut its net carbon emissions across Scopes 1, 2 and 3 by 45% this decade, compared to 2019 levels. This included a ‘significant best efforts’ obligation for Scopes 2 and 3 (indirect and supply chain emissions) and a ‘results-based’ obligation for Scope 1 (direct emissions from operations that are owned or controlled by a company).  

However, the Dutch Court of Appeal upheld Shell’s appeal in respect of the specific percentage reduction. It ruled that while Shell had an ‘individual responsibility’ to reduce its CO₂ emissions, it could not impose a specific reduction obligation on the company as under current Dutch law, while companies are obligated to contribute to the mitigation of climate change and in order to comply with the social standard of care they must make an appropriate contribution to achieving the emissions reduction goals of the Paris Agreement, companies can choose their own approach as to how they achieve this.  

The Court did underscore, however, that climate protection is a ‘human right’ and mandated that companies, not just states, have a duty to protect human rights in the context of climate change. The Court also pointed out the incompatibility of exploring new oil and gas fields with the goals of the Paris Climate Agreement.

The win provides Shell with a significant legal victory in its climate litigation battle brought by Milieudefensie, other NGOs (including Greenpeace), and over 17,000 private individuals in 2018, and marks a pivotal moment in the ongoing debate over corporate responsibility in combating climate change.

Shell welcomed the ruling, having previously argued that the original Court mandate would not have effectively reduced overall customer demand for its fossil fuel products such as petrol and diesel for cars, or for gas to heat and power homes and businesses, as consumers would simply have sourced their energy needs elsewhere and overall emissions would not have been reduced.

‘We are pleased with the Court’s decision, which we believe is the right one for the global energy transition, the Netherlands, and our company,’ stated Shell Chief Executive Officer Wael Sawan.  

The CEO also reaffirmed Shell’s target to become a net zero emissions energy business by 2050. He emphasised the company’s commitment to halving emissions from its operations by 2030, pointing to the group’s current $10–15bn investment in low-carbon energy solutions between 2023 and the end of 2025, including projects in electric vehicle charging, biofuels, renewable power, hydrogen, and carbon capture and storage.

Milieudefensie, while expressing disappointment, acknowledged the case’s role in highlighting the responsibility of major polluters in addressing climate change. ‘This hurts,’ said Milieudefensie Director Donald Pols. ‘At the same time, we see that this case has ensured that major polluters are not inviolable and has further fuelled the debate about their responsibility in combating dangerous climate change.’

Shell says it has made progress in reducing its emissions, achieving at the end of 2023 more than 60% of its target to halve Scope 1 and 2 emissions from its operations by 2030, compared to 2016 levels. Additionally, it met its short-term target to reduce the net carbon intensity of the energy products it sells by 6.3% against its target of 6–8% compared to 2016.

The company also highlights its focus on reducing methane emissions, with a 70% reduction since 2016 and maintaining methane emission intensity well below 0.2% throughout 2023. To further decarbonise transport, Shell set a new target in 2024 to reduce customer emissions from its oil products (such as gasoline, diesel and kerosene) by 15–20% by 2030, compared to 2021.

Despite the setback in the Court of Appeal, Milieudefensie and other environmental organisations remain steadfast in their fight against major polluters. ‘This is a ruling for the entire business community and not just for Shell. The Court makes it abundantly clear that not only countries but also companies have a responsibility to reduce their emissions in line with the Paris Climate Agreement,’ stated complainant lawyer Roger Cox.

Kirtana Chandrasekaran, International Program Coordinator for Food Sovereignty at Friends of the Earth International, commented: ‘This ruling is a blow to communities all over the world who are bearing the brunt of climate inaction and greenwashing by corporations. Yet the ruling also gives hope – it confirms that corporations must respect human rights and that they bear responsibility for reducing emissions.’

Andy Palmen, Director of Greenpeace Nederland, added that the ruling underlined how important the UN Climate Summit in Baku is. ‘The summit in Dubai last year heralded the end of coal, oil and gas, now governments need to come up with concrete plans to move away from fossil fuels,’ he continued.  

Meanwhile, Shell and partners Equinor and Ithaca Energy are currently facing environmental groups Greenpeace and Uplift in the UK courts regarding new oil drilling in the North Sea Rosebank and Jackdaw fields. Reporting on the ongoing case, the BBC noted that the UK government recently admitted that the approval of Rosebank, the country’s largest untapped oil field, was granted unlawfully, with the environmental impact assessments not considering the climate impact of burning the extracted fossil fuels. In June this year, the UK Supreme Court ruled in a separate case, involving plans to drill an oil well near London’s Gatwick Airport, that both types of emissions should be included in an environmental impact assessment.

Rosebank was given the green light in September 2023 and Jackdaw in June 2022, both by the previous Conservative administration.

As the hearing continues, the ultimate decision may rest with the new Labour government, which could demand fuller environmental impact assessments before allowing the projects to proceed.