Shell’s Board of Directors is Being Sued
Mar 16, 2022 By MarketDepth
Shell’s (NYSE: SHEL) board of directors is being sued, as it has not adequately prepared the company for the transition away from fossil fuels.
Activists Filing Suit
The lawsuit was brought by activist shareholders, ClientEarth, as it claims that Shell’s 13 directors are liable for the lack of action in line with the Paris agreement. The agreement strives to reduce global heating to below 2C by cutting down on fossil fuel emissions.
First Case of Lawsuit
This is thought to be the first case of its kind as it tries to hold a company’s board responsible “for failing to properly prepare for the net zero transition.”
“Shell is seriously exposed to the physical and transitional risks of climate change, yet its climate plan is fundamentally flawed.”Paul Benson, a ClientEarth lawyer
“The longer the Board delays, the more likely it is that the company will have to execute an abrupt ‘handbrake turn’ to retain commercial competitiveness and meet the challenges of inevitable regulatory developments,” Benson said.
ClientEarth, a non profit group, has a history of winning climate-related cases and stated that it has notified Shell and hopes to hear a response before formally filing papers in the high court of England and Wales. Nevertheless, if successful, Shell’s board may be required to modify its strategy and take specific steps to align its plan with the Paris deal.