Richard Raban-Williams & John Doherty review an innovative attempt to challenge Shell’s climate change policies
- The first recorded attempt to use a derivative action to hold directors liable for a company’s climate crisis response has been brought by ClientEarth.
- Explains why the claim failed in the High Court. However, it may be appealed.
- The requirement for good faith and the views of other shareholders may be of consequence to future derivative actions.
Like the wildfires that have raged across the globe recently, disputes related to climate change continue to flare up. Most recently, in July 2023, the High Court in London handed down its final judgment in a claim brought by ClientEarth against Shell and its board of directors.
The decision is the first recorded attempt to use a derivative action to hold directors liable for a company’s response to the climate crisis. ClientEarth sought injunctive and declaratory relief, rather than damages, presumably reflecting the challenges presented by demonstrating shareholder loss in the context of such climate claims, with the value of major oil companies continuing
