Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

People v Shell: from ‘corporate social responsibility’ to legal accountability

Alejandro García Esteban and Jill McArdle 14th June 2021

The successful action by citizens and NGOs in a Dutch court against Shell has sent a frisson through corporate boardrooms—with reason.

Shell,climate,human rights,Netherlands,court
Alejandro García Esteban

In a historic victory for climate justice, in late May a Dutch civil court held a corporation liable for the first time for its contribution to climate change. The ruling that the oil giant Shell must reduce its global carbon-dioxide emissions by 45 per cent from 2019 levels by 2030 is a game-changer for corporate accountability and our future on this planet. 

The decision sets a precedent for litigation against slow-moving polluters. Not only has it opened new legal avenues for climate action. The judges clearly spelt out that companies have an individual responsibility to combat climate change, because of its severe impacts on human rights.

Shell,climate,human rights,Netherlands,court,Dutch
Jill McArdle

Woefully inadequate

Climate litigation is in full flood. With thousands of cases in 37 countries around the world, including 57 in Europe, taking climate laggards to court is all the rage. Judges across Europe are telling governments finally to face the music: their efforts to protect people and the planet from dangerous climate change are woefully inadequate.

In December 2019, the Supreme Court in the Netherlands found the Dutch government’s emissions-reduction plan insufficient. Last July, the Supreme Court in Ireland quashed its government’s mitigation plan. In February, a Paris court convicted the French state of not keeping its promise to tackle emissions. And in April the German Constitutional Court forced the federal government to revise climate-change laws.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

But litigation is increasingly also holding the feet to the fire of the worst corporate emitters of greenhouse gases—not just governments. An early instance was in 2015 when a Peruvian farmer, supported by the NGO Germanwatch, took on the energy giant RWE, one of Europe’s largest CO2 emitters. He sought 0.47 per cent of the estimated cost of preventing a potential glacial-lake flood threatening his home—an amount corresponding to the company’s contribution to global-heating emissions.

Uphill battle

Until a few weeks ago, however, holding companies liable for the harm triggered by climate change had been an uphill battle. The sticking point? Proving a causal link between a specific source of emissions and the resulting harm.

The lawsuit against Royal Dutch Shell, brought by Friends of the Earth Netherlands (Milieudefensie), together with 17,000 co-plaintiffs and six other organisations, used a different approach—and it worked. Instead of seeking compensatory damages, claimants used litigation as a tool to force Shell—Europe’s largest public company and the world’s ninth highest-emitting corporation—to change its fossil-fuel-addicted business model. French NGOs and local authorities are trying the same strategy in a case against Total.

The judgment was not only significant because it ordered an oil major to cut its emissions drastically. The court used the United Nations’ Guiding Principles on Business and Human Rights (UNGPs) to establish that Shell had an obligation to prevent climate change through its corporate policy.

According to the judges, the UNGPs—which compel companies to identify, prevent, mitigate and account for their impacts on human rights across their global value chains—are the authoritative ‘gold standard’ for corporate conduct. While not legally binding, all companies are expected to comply with them, regardless of whether they have signed up as such.

Shaking in their boots

The European Commission is now considering turning the principles into clear, mandatory, due-diligence legislation. It is drafting a proposal for a directive that would empower administrative and judicial authorities to enforce corporate obligations with regard to human rights.

This has corporate interest groups shaking in their boots, promoting the idea that the case against Shell somehow proves that ‘the system is working’ and hence ‘no legislative reform is needed’. Nothing could be further from the truth. While the Dutch court was right to hold Shell accountable, against the non-binding yet universally-endorsed UNGPs, there’s no guarantee a different court would have done the same.

In fact, this landmark decision underlines why we need a corporate duty of care for human rights and the environment in the EU and why companies should be held liable in the courts for breach of this duty. Whether companies address their human rights and environmental impacts and be held accountable for abuses—including climate change—should not be left to interpretation. Nor should civil society, trade unions and those affected by corporate abuse be left to shoulder the burden of seeking corporate compliance, via long and costly judicial proceedings, on a company-by-company basis.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

Far-reaching implications

The verdict against Shell has far-reaching implications for polluters. So what does it say?

The claimants argued that Shell violated its duty of care by knowingly undermining the world’s chances of restricting warming to 1.5C above pre-industrial levels. Since at least the 1980s, it had known about the impact of fossil fuels on climate change, claiming in an internal report that ‘the changes may be the greatest in recorded history’.

The judges confirmed that Shell was failing to meet climate goals—the company emits nine times as much CO2 as all of the Netherlands. Causing dangerous climate change entailed a violation of the right to life and the right to respect for family life, under the Dutch civil code and the European Convention on Human Rights. In an unprecedented decision, the judges ordered the company to reduce its emissions in line with the Paris agreement, to comply with its human-rights obligations.

This requirement, focused on results, will not only apply to Shell’s own emissions but to those of its entire corporate group and global value chain, because of the far-reaching control and influence of the parent company over its approximately 1,100 subsidiaries. In addition, it must make ‘significant best-efforts’ to use its influence to limit the CO2 emissions generated by its business relationships, including suppliers and customers around the world, by changing its purchasing policy and energy package.

Clear message

The message to all polluters is clear: reduce emissions or be prepared to be compelled to do so. The hope is that the verdict against Shell will lead to further successful climate cases against big emitters, forcing them to slash their carbon footprints and make the transition away from fossil fuels. This must extend to all transnational enterprises failing to meet their human-rights obligations in global operations and value chains.

But change is also needed beyond courtrooms. From the halls of government to the chambers of parliaments, decision-makers must write clearer and more ambitious laws on corporate due diligence, based on the UNGPs, and use legal tools to hold companies accountable and liable for abuses.

It is crucial that all corporations—not just Dutch ones—can be taken to court, in their home country, for environmental and human-rights abuses.

Shell,climate,human rights,Netherlands,court,Dutch
Alejandro García Esteban

Alejandro García Esteban is a policy officer at the European Coalition for Corporate Justice.

Pics 1
Jill McArdle

Jill McArdle is a campaigner for corporate accountability at Friends of the Earth Europe, based in Brussels.

You are here: Home / Ecology / People v Shell: from ‘corporate social responsibility’ to legal accountability

Most Popular Posts

European civil war,iron curtain,NATO,Ukraine,Gorbachev The new European civil warGuido Montani
Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse

Most Recent Posts

European civil war,iron curtain,NATO,Ukraine,Gorbachev The new European civil warGuido Montani
artists,cultural workers Europe’s stars must shine for artists and creativesIsabelle Van de Gejuchte
transition,deindustrialisation,degradation,environment Europe’s industry and the ecological transitionCharlotte Bez and Lorenzo Feltrin
central and eastern Europe,unions,recognition Social dialogue in central and eastern EuropeMartin Myant
women soldiers,Ukraine Ukraine war: attitudes changing to women soldiersJennifer Mathers and Anna Kvit

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

ETUI advertisement

Social policy in the European Union: state of play 2022

Since 2000, the annual Bilan social volume has been analysing the state of play of social policy in the European Union during the preceding year, the better to forecast developments in the new one. Co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), the new edition is no exception. In the context of multiple crises, the authors find that social policies gained in ambition in 2022. At the same time, the new EU economic framework, expected for 2023, should be made compatible with achieving the EU’s social and ‘green’ objectives. Finally, they raise the question whether the EU Social Imbalances Procedure and Open Strategic Autonomy paradigm could provide windows of opportunity to sustain the EU’s social ambition in the long run.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

Discover the new FEPS Progressive Yearbook and what 2023 has in store for us!

The Progressive Yearbook focuses on transversal European issues that have left a mark on 2022, delivering insightful future-oriented analysis for the new year. It counts on renowned authors' contributions, including academics, politicians and analysts. This fourth edition is published in a time of war and, therefore, it mostly looks at the conflict itself, the actors involved and the implications for Europe.


DOWNLOAD HERE

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube