UK court dismisses Shell climate case

(Reuters) — Environmental activist organization ClientEarth’s unsuccessful attempt to sue Shell over its climate strategy shows the difficulties in bringing activist shareholder claims, lawyers said Monday, after London’s High Court dismissed the case.

ClientEarth, which holds 27 shares in Shell, alleges the company cannot achieve its aim of net zero carbon emissions by 2050 with its current climate transition strategy and its directors are therefore breaching their duties to shareholders.

The group wanted to bring a so-called derivative case on behalf of Shell against its directors, which could have seen other companies face investors’ lawsuits over climate-related risks.

However, Judge William Trower refused permission to bring the case. He ruled that ClientEarth’s case ignored that managing large businesses requires directors to “take into account a range of competing considerations,” in which courts should not interfere.

A Shell spokesperson welcomed the ruling and described ClientEarth’s case as “fundamentally flawed.”

Paul Benson, a senior lawyer at ClientEarth, said the organization was disappointed and intended to pursue an appeal.