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Hague orders emissions cut: a brave new world for energy and beyond?

News / / London

Climate change is a topic of interest for businesses worldwide. While many take proactive steps to show their commitment to the global pursuit of environmental sustainability, we continue to see a rise in legal action brought against both governments and companies worldwide to accelerate efforts to achieving net-zero emissions.

On 26 May 2021, the District Court of the Hague published its precedent-setting decision, ordering Royal Dutch Shell to reduce its greenhouse gas emissions by 45% by 2030. The proceedings were initiated by environmental groups Milieudefensie (Friends of the Earth Netherlands), ActionAid and others as well as over 17,000 Dutch citizens.

Litigation against fossil fuel companies is not new, but this is the first time that a corporation has been held responsible by a court, and shows that climate change issues cannot be resolved by simply asking a corporation to pay damages. The court found that whilst Royal Dutch Shell was not presently in breach of its reduction obligation (as argued by the Claimants), it may be forced to completely overhaul its operations and corporate strategy, despite prior plans to reduce the carbon intensity of its energy products and continued investment in cleaner fuels.

This latest decision will no doubt come as a blow to Royal Dutch Shell, who earlier this year was held responsible for the damage caused by its foreign subsidiary, Shell Nigeria. To read more on the Shell Nigeria case, please see The Hague court of appeal finds in favour of Nigerian farmers against Shell.

We expect this landmark decision will have implications for businesses and industries worldwide, despite the judgement only applying in the Netherlands. As such, over the next coming weeks, we will be looking at the effect this decision may have on leading industries, with guidance on risk and measures of safeguarding as much as possible.

Stuart McAlpine

Stuart McAlpine Global Head of Marine Projects

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