Shell Directors Climate Risk Law Suit (Litigation)

The NGO ClientEarth (a shareholder in Shell) has today (9th February 2023) filed a world-first lawsuit against the Board of Directors of Shell plc for failing to manage the material and foreseeable risks posed to the company by climate change.

The lawsuit alleges Shell’s 11 directors have breached their legal duties under the UK Companies Act by failing to adopt and implement an energy transition strategy that aligns with the Paris Agreement.

ClientEarth’s claim is filed in the High Court of England and Wales and is supported by a group of institutional investors collectively holding more than 12 million shares in the company, and more than half a trillion US dollars (£450 billion) in total assets under management (AUM).

In May 2021, a Dutch court ordered a net 45% reduction in group-wide emissions by the end of the 2020s. Shell has appealed the judgement, ClientEarth also alleges that the Board’s failure to fully comply with the Dutch Court’s judgment is an additional breach of its legal duties.

ClientEarth is represented by London litigation firm Pallas Partners, and is asking the High Court for an Order which requires the Shell Board to adopt a strategy to manage climate risk in line with its duties under the Companies Act, and in compliance with the Dutch Court judgment. The High Court will decide whether to grant ClientEarth permission to bring the claim.

The ClientEarth press release is here. It also has a link to FAQs.

Further Neonictinoids Ban (EU)

On 2nd Feb 2023, the EU Commission adopted new rules which, once applicable in 2026, will lower the Maximum Residues Levels (MRLs) of two pesticides in food.

Assessments by the European Food Safety Authority showed that the two chemicals, belonging to the group of neonicotinoid pesticides, clothianidin and thiamethoxam, pose a high risk to bees and contribute to the global decline of pollinators. For this reason, their outdoor use was banned in the EU in 2018.

The new rules will lower existing MRLs for these substances to the lowest level that can be measured with the latest technologies. They will apply to all products produced in the EU, and also to imported food and feed products.

The new rules will be issued as an EU Regulation, that will amend the existing 2005 Regulation. Further information is here.

Also on 19th Jan 2023, the EU court published a preliminary ruling on questions posed by the Belgian Administrative Court, following a complaint by PAN Europe, Nature & Progrès Belgium and a Belgian beekeeper. The Court declared that providing derogations for the treatment of seeds with a banned pesticide and their use is not in line with EU law. The ruling is here.

ECHA PFASs Ban Proposal (EU)

In a major development, the European Chemicals Agency (ECHA) has today 7th Feb 2023 published its proposal to ban PFASs.

Per- and polyfluoroalkyl substances (PFASs) are a large class of thousands of synthetic chemicals in common use. They are increasingly detected as environmental pollutants and some are linked to negative effects on human health.

ECHA states as they all contain carbon-fluorine bonds, which are one of the strongest chemical bonds in organic chemistry, it means that they resist degradation when used and also in the environment. Most PFASs are also easily transported in the environment covering long distances away from the source of their release.

ECHA states that PFASs have been frequently observed to contaminate groundwater, surface water and soil. In addition, cleaning up polluted sites is technically difficult and costly. And so, if releases continue, they will continue to accumulate in the environment, drinking water and food.

Information about the ECHA proposal and ECHA’s next steps are here.