RDSA Shell Plc

By Sarah McFarlane

A Dutch court on Wednesday ruled that Royal Dutch Shell PLC is partially responsible for climate change and ordered the company to reduce its carbon emissions, a first-of-its-kind ruling that adds fresh pressure on oil-and-gas companies already facing heightened scrutiny from governments and investors.

The ruling, issued by the district court in the Hague, ruled Shell must curb its carbon emissions by 45% by 2030, compared to 2019 levels. This is in line with United Nations guidance for member states aimed at preventing global temperatures rising more than 1.5 degrees Celsius above pre-industrial levels.

Lawyers said the ruling, which Shell can appeal, could set a precedent in other Western jurisdictions, particularly in Europe, opening oil companies to a new legal jeopardy over their carbon emissions. The court didn't stipulate how the ordered reductions should be met, or how it might monitor or enforce its ruling.

Friends of the Earth Netherlands, a local offshoot of the global environmental non-profit network based in Amsterdam, led the civil lawsuit against Shell. It alleged the company's production of oil and natural gas contributed to climate change, violating a so-called duty of care to those affected by it, and ignoring the company's human-rights obligations. It asked the court to force Shell to reduce its carbon emissions.

The court said that Shell wasn't in breach of its obligation to reduce carbon emissions, but that there was an "imminent breach" and therefore set the reduction requirement. The case was heard in December in the Hague. Shell has dual headquarters in the Hague and London.

Shell argued that climate change is a broader societal issue, and that it wasn't appropriate to ask a single private party to reduce its carbon emissions. The company didn't immediately respond to a request for comment.

Write to Sarah McFarlane by sarah.mcfarlane@wsj.com

(END) Dow Jones Newswires

May 26, 2021 10:34 ET (14:34 GMT)

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