Compliance » Shell Oil Board Of Directors Sued In UK Court

Shell Oil Board Of Directors Sued In UK Court

Shell oil tank truck on an airport runway.

February 20, 2023

UK non-profit ClientEarth has sued company directors at oil giant Shell PLC, alleging the company is not acting in the best interest of its own business, as well as the planet, by failing to manage climate risk and by lagging in transitioning into non-fossil energy.

ClientEarth has a minuscule holding in the company, but it’s supported in the suit by institutional investors from several countries in Europe with combined assets of about $550 billion and with more that 12 million shares in the company, according to an article in the trade publication Pension & Investments. Shell fossil fuel projects now in development “pose risks to investors in terms of carbon lock-in and stranded assets,” said an official at one of those funds, the London-based National Employment Savings Trust (NEST). “We hope the whole energy industry sits up and take notice.” NEST is said to be the UK’s largest workplace pension plan, with 10 million members.

The suit, filed in the High Court of England and Wales, asks Shell’s board to adopt a client-risk strategy that complies with a court order previously issued by a Dutch court, as the result of another lawsuit, which was initiated by Greenpeace.

The ClientEarth lawsuit comes at a time when company directors are increasingly being targeted in lawsuits, including actions based on alleged director failure to respond to ESG requirements.

Share this post:

Find this article interesting?

Sign up for more with a complimentary subscription to Today’s General Counsel magazine.