By Benoit Faucon, Sarah McFarlane and Laura Kusisto
A court decision ordering Royal Dutch Shell PLC to cut its
carbon emissions has emboldened litigants in similar cases,
including two that could have big implications for Exxon Mobil
Corp. and French oil giant Total.
Companies in various industries have already grasped the
ruling's potential ripple effects, such as whether they will need
to speed up plans to reduce their emissions, lawyers said, and are
seeking advice on whether it could apply outside the Netherlands.
The ruling could set a precedent, at least in Europe, that
individual companies bear a legal responsibility to protect people
from climate change.
Shell's defeat comes as oil-and-gas companies face growing
scrutiny over their emissions from activists, governments and
investors, and adds momentum to other climate-related suits where
the legal system or arguments are similar, plaintiffs and legal
Other cases using similar arguments to target oil companies have
faced setbacks, however, while some lawyers and analysts think
Shell could successfully appeal the decision and question the
court's jurisdiction over the company's global strategy.
Shell has said it plans to appeal the verdict, a process that
could take years.
The ruling's influence could soon be put to the test in France,
where environmental groups and local authorities have filed a
similar case targeting TotalEnergies SE -- the energy company known
until last month as Total.
A judicial court in Nanterre, a Paris suburb near the company's
headquarters, is set to rule in September whether it can move
forward with the case. The suit seeks to force TotalEnergies to
immediately cease exploration and cut emissions by reducing oil
production by 37% by 2030, from 2010 levels.
Paul Mougeolle, a legal adviser at Notre Affaire à Tous, an
environmental nonprofit that is the lead plaintiff in the case,
said the group had coordinated early on with the complainants in
the Dutch case to formulate a common legal strategy.
The Dutch and French complaints both rely on what is known as
"duty of care" legislation, which requires that companies ensure
that their operations don't harm citizens, including through
climate change, Mr. Mougeolle said.
TotalEnergies, which declined to comment on the case, has
challenged the court's competency to handle the suit, saying it
should be dealt with by a commercial tribunal.
Friends of the Earth Netherlands, the nonprofit that sued Shell,
said it has started preparations to target companies beyond the
energy sector, focusing on Dutch businesses with global operations.
It has also shared translations of legal documents with similar
organizations in other countries.
"What we are now doing is seeing where there are other sectors
with a global footprint that need an extra push in order to go the
extra mile," said Donald Pols, the group's director.
Overall there are around 1,800 lawsuits related to climate
world-wide, according to a database produced by Columbia
University's Sabin Center for Climate Change Law, most of which are
in the U.S.
Yet legal experts don't expect the Shell ruling to have a big
influence in the U.S. American law is likely to be less favorable
to environmental groups, they said, because, unlike European
courts, most federal courts haven't recognized a constitutional
right to a clean environment.
Local governments in the U.S. have instead tried to use
common-law nuisance claims to force companies to pay the costs of
adapting to the effects of climate change. Most of those cases are
Should a case end up at the Supreme Court, the
conservative-leaning panel could be skeptical of allowing cities to
get involved in regulating global matters, said Rachel Rothschild,
a legal fellow at the Institute for Policy Integrity at New York
University School of Law.
The Dutch court ruling against Shell found that the company
contributed to climate change and ordered it to cut emissions by
45% by 2030, compared with 2019 levels. The court decision was
based on broadly accepted United Nations guidance aimed at limiting
global warming and human-rights-related law that is similar across
"The decision adds to the growing body of judicial decisions
that recognize the connection between climate change and human
rights, and the need for those in power, whether they be
governments or fossil-fuel companies, to protect human rights by
decreasing climate pollution," said Michael Burger, executive
director of the Sabin Center.
Litigants and legal experts said the ruling also encourages
plaintiffs in a recently filed case targeting a major Exxon-led oil
project in Guyana, where a consortium has already initiated
production and poured $10 billion into the country.
Last month, two citizens sued the government in the South
American country's constitutional court, seeking to block all oil
production. The plaintiffs argued that the project would worsen
climate change and violated the government's legal duty to protect
citizens' rights to a healthy environment.
"The Shell case is extremely relevant for Guyana," said Carroll
Muffett, chief executive of the Center for International
Environmental Law, a not-for-profit law firm that studies
climate-change jurisprudence. He said both cases center on using
the U.N.'s climate-change framework to hold entities accountable
for human rights.
Melinda Janki, the plaintiffs' lead lawyer in the Guyana case,
said she was encouraged because the Dutch case prevailed using
similar arguments to her strategy. She estimates that the Exxon
discoveries of nine billion barrels of oil will generate about 3.87
gigatons of carbon emissions.
The litigation is "about stopping a massive increase in carbon
emission, a carbon bomb," she said. Ms. Janki said much of Guyana's
coastline is at risk of flooding because it is below sea level,
making it "one of the countries most vulnerable to climate
An aide to Guyana Vice President Bharrat Jagdeo, who is in
charge of oil matters, declined to comment. The first hearing in
the case has yet to take place.
A spokesman for Exxon, which isn't a defendant in the case, said
the company complies with all applicable laws in Guyana, and that
the oil giant already has plans to reduce emissions.
Write to Benoit Faucon at email@example.com, Sarah McFarlane
at firstname.lastname@example.org and Laura Kusisto at
(END) Dow Jones Newswires
June 06, 2021 09:19 ET (13:19 GMT)
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