Last month the Hague District Court issued a dramatic decision ordering Royal Dutch Shell (RDS), the parent company of the Shell group, to reduce the carbon emissions of the Shell group by 45% (relative to their 2019 levels) by 2030.
The case was brought by a number of environmental activism groups including Vereniging Milieudefensie and Stichten Greenpeace Nederland. In it, the claimants argued that RDS' failure to reduce the Shell group's carbon emissions was unlawful and had caused them harm. They further argued that this harm was specifically caused by the corporate policy set out and implemented across the Shell group by RDS.
The Dutch court held that it was accepted by the parties that climate change due to carbon emissions constituted environmental damage, and that it was clear that the effects of climate change were causing harm to the citizens of the Netherlands. It also accepted the claimants' argument that it was RDS's corporate policies which caused the Shell group's failure to reduce its emissions, and was therefore the relevant "event giving rise to the damage" for the purposes of the Rome Convention on governing law. As a result, it held that the event had occurred in the Netherlands (where RDS is based), and thus the claim was subject to both Dutch law and the jurisdiction of the Dutch courts.
Having concluded that the claim could be brought, the Dutch court considered the nature and extent of RDS' "unwritten standard of care" to the public. In doing so, the court took into account (and incorporated) international law and voluntary standards (which RDS had itself endorsed) in relation to carbon emissions. Having done so, the court accepted that the Shell group's failure to reduce its emissions amounted to a breach of RDS' duty of care to the citizens of the Netherlands. Accordingly, the Court held that RDS had acted unlawfully in failing to reduce its emissions, and ordered that RDS take steps to reduce the Shell group's emissions by at least 45% by 2030.
While an appeal by RDS is expected, this is potentially a very significant decision. Dutch courts have taken jurisdiction over a matter of global importance and made orders that will have a significant impact on the Shell group's activities worldwide. Of course, the Dutch court's ability to do so depended on RDS being located in the Netherlands. However, this case may well inspire the courts in other jurisdictions to adopt a more active role in policing compliance with international commitments in relation to climate change and other significant issues.