The climate case against Shell produced two judgments with very different outcomes. In 2021 the District Court of The Hague held that Shell owed an unwritten duty of care under Article 6:162 of the Dutch Civil Code (Burgerlijk Wetboek, BW), read in the light of human rights and climate science. It ordered Shell to reduce the CO2 emissions of the group and its value chain by a net 45% by the end of 2030, compared with 2019.
On appeal, on 12 November 2024, the Court of Appeal of The Hague set that order aside. It confirmed that Shell has a duty towards citizens to limit its CO2 emissions, and that such a duty can apply to a private company. But it held that it could not impose a specific reduction percentage on this company. The significance of the case therefore lies in the principle rather than in the figure: a company’s climate conduct can be tested by a court, and the content of the duty is decided case by case. The case is now before the Supreme Court (Hoge Raad).
What did the climate case against Shell decide?
In short: the first judgment imposed a 45% reduction order, the appeal judgment kept the duty of care but dropped the order. The case was brought by the environmental association Milieudefensie, together with other organisations and individual claimants, against Royal Dutch Shell PLC (now Shell plc, referred to here as Shell). The District Court gave judgment on 26 May 2021 (ECLI:NL:RBDHA:2021:5339). For the Netherlands, it was the next step after the Urgenda case, in which the Supreme Court on 20 December 2019 confirmed that the Dutch State had to reduce its greenhouse gas emissions by at least 25% by the end of 2020 compared with 1990 (ECLI:NL:HR:2019:2007). The Shell case was the first time a Dutch court applied a comparable line of reasoning to a company. Below we explain the main elements of the 2021 ruling, what the Court of Appeal changed, and what this means for your business.
Who was allowed to bring the claim?
Only the collective claims for the interests of current and future generations of Dutch residents were admissible. Before a court can rule on the substance of a civil claim, the claim must be admissible. The District Court held that collective actions serving the interests of Dutch residents concerned sufficiently similar interests, and could therefore be heard. Claims on behalf of the world population as a whole did not meet that test.
The reason is that the consequences of climate change for Dutch residents differ less from person to person than the consequences for the world population as a whole. ActionAid, with its broadly worded global objective, did not sufficiently represent the specific interests of the Dutch population. Its claim was therefore declared inadmissible. The individual claimants were also declared inadmissible, because they had not shown a sufficient individual interest next to the collective claim.
Which circumstances did the District Court weigh?
The court looked at Shell’s position in the group, the size of its emissions and their effect on Dutch residents. To grant Milieudefensie’s claim for a net reduction of 45%, the court first had to establish that such an obligation rested on Shell. It assessed this under the unwritten standard of care of Article 6:162 BW, in which all circumstances of the case play a role. The circumstances the court took into account included the following.
Shell sets the policy for the entire Shell group, and the other group companies carry it out. Together with its suppliers and customers, the group is responsible for very large CO2 emissions, higher than those of a number of states, including the Netherlands. These emissions contribute to climate change. Dutch residents feel the consequences, for example in their health and through physical risks such as rising sea levels.
What role did human rights play?
Human rights shaped the content of Shell’s duty of care, even though they do not bind companies directly. According to the court, the consequences of climate change affect the human rights of Dutch residents, in particular the right to life and the right to respect for private and family life. Human rights treaties in principle govern the relationship between citizens and the state. Companies are therefore not directly bound by them, but they are expected to respect these rights. That expectation also applies when states fail to protect against violations.
The responsibility of companies to respect human rights is also set out in soft law instruments. Examples are the UN Guiding Principles on Business and Human Rights, which Shell endorses, and the OECD Guidelines for Multinational Enterprises. According to the court, the widely accepted views in these instruments help to interpret the unwritten standard of care on which an obligation for Shell could be based.
How far did Shell’s obligation reach?
The District Court distinguished between Shell’s own group and its value chain. The extent of a company’s responsibility to respect human rights depends on how seriously its activities affect those rights. Based on the facts described above, the court found that this was the case for Shell. Before such an obligation can be accepted, the company must also have enough means and influence to prevent the harm.
The court found that Shell has that influence throughout its value chain. Within the group it can steer through its own policy, and towards customers and suppliers through the products and services it offers. Because its influence is greatest within the group itself, the court imposed an obligation of result for the group’s own emissions. For the emissions of suppliers and customers, it imposed a significant best-efforts obligation.
To set the size of the obligation, the court relied on the Paris Agreement and the reports of the IPCC, the UN climate panel. It took the widely accepted goal of limiting global warming to 1.5 degrees Celsius as the starting point. In the court’s view, the claimed net reduction of 45% compared with 2019 matched the reduction pathways in the IPCC reports closely enough. A court can only impose such an order if a company breaches its obligation or threatens to do so. The court found that Shell’s group policy was not concrete enough to rule out such a threatened breach.
What did the District Court order, and why did Shell’s defences fail?
The District Court ordered Shell to cut the group’s total emissions by a net 45% by the end of 2030. In full: Shell had to limit, or cause to be limited, the combined annual volume of all CO2 emissions into the atmosphere (Scope 1, 2 and 3) linked to the business activities of the Shell group and the energy-carrying products it sells. By the end of 2030 that volume had to be at least a net 45% lower than in 2019. Shell’s defences were not strong enough to prevent this order.
For example, the court found that Shell had not sufficiently shown its ‘perfect substitution’ argument: the claim that other companies would simply take over the Shell group’s activities if a reduction order were imposed. In addition, the fact that Shell is not solely responsible for climate change did not relieve it of its own responsibility to help limit global warming.
What did the Court of Appeal change in 2024?
The Court of Appeal kept the duty of care but set aside the 45% order. In its judgment of 12 November 2024 (ECLI:NL:GHDHA:2024:2100) the court confirmed that Shell has an obligation towards citizens to limit its CO2 emissions, based on the protection human rights offer against dangerous climate change. On the concrete claims, however, it ruled in Shell’s favour.
- Own emissions (Scope 1 and 2). Shell was already working to reduce these emissions, so the court found no breach that justified an order.
- Emissions from the use of its products (Scope 3). According to the court, there is currently not enough consensus in climate science on a specific reduction percentage for an individual company like Shell.
- Effectiveness. The court also reasoned that Shell could meet an order for fuels it buys from third parties by simply stopping that trade, after which other companies would take it over. Such an order would then not reduce global emissions.
Milieudefensie and the other organisations appealed to the Supreme Court in February 2025. According to Milieudefensie, the Supreme Court held a hearing in May 2026, and a final judgment is not expected before 2027. Milieudefensie has also started a second case against Shell, which focuses on the development of new oil and gas fields. We follow both cases and will update this article when there is a ruling.
What does this mean for other companies?
Companies with large emissions can be held to a duty of care, but a court will not easily set a fixed reduction percentage. Both judgments accept that a company’s climate policy can be tested against the unwritten standard of care of Article 6:162 BW. That means other companies responsible for significant emissions, such as other oil and gas companies, can also be taken to court if their policy does too little to limit those emissions. After the appeal judgment, it is less likely that a court will impose a specific percentage. Even so, the liability risk calls for a credible and concrete reduction policy throughout the value chain: for the company and its group, and towards customers and suppliers.
In practice, a few points are worth attention:
- Set concrete and verifiable targets for your own emissions, and document how you plan to meet them.
- Map the emissions in your value chain and what influence you have on suppliers and customers.
- Check that your public statements about climate policy match what you actually do.
- Keep an eye on the Supreme Court’s ruling, which may clarify how far a company’s duty reaches.
In summary
- In 2021 the District Court of The Hague ordered Shell to cut its group and value chain emissions by a net 45% by the end of 2030, compared with 2019.
- The duty was based on the unwritten standard of care of Article 6:162 BW, read in the light of human rights and soft law such as the UN Guiding Principles.
- On 12 November 2024 the Court of Appeal confirmed the duty of care but set aside the reduction order.
- The case is pending before the Supreme Court; a final ruling is not expected before 2027.
- Companies with significant emissions should expect their climate policy to be tested in court.
Frequently asked questions
Does Shell still have to cut its emissions by 45%?
No. The Court of Appeal set aside that order on 12 November 2024. The duty of care itself still stands, and the Supreme Court will now give the final word.
Can my company be sued over its climate policy?
Yes, in principle. Both judgments accept that a company’s climate conduct can be tested under Article 6:162 BW. How likely a claim is depends on the size of your emissions and how concrete your reduction policy is.
Who can bring such a claim?
In the Shell case, only the collective claims on behalf of Dutch residents were admissible. Claims on behalf of the world population and the individual claims were declared inadmissible.
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