Shell Has Wiggle Room9 Jun 2021 14:51
Shell has some wiggle room
What will now happen with Shell? That still remains to be seen. While the appeals process plays out over the next couple of years, the company will already have to drastically change its policies. Immediate compliance is required, since the order has been declared provisionally enforceable.
Still, there is a lot of wiggle room for Shell. By far the most (85%) of the emissions that the order holds Shell responsible for are indirect emissions – this includes emissions from products sold by Shell, such as petrol that is then burnt by a car user. And with respect to these indirect emissions the order only stipulates a “significant best-efforts obligation” instead of an absolute obligation.
And even if Shell really does its utmost to work with other organisations, including governments, to speed up the low-carbon transition in the next nine years, it may be “saved” from having to aspire to meet the stringent target set. In the appeals process the size of the emissions reduction ordered (45%) may be overturned and lowered to 35% or even 25%.
The court judged that a global emissions reduction of at least 45% is needed to avoid warming of 1.5?. If not, the human rights (of Dutch citizens in this court case) will be harmed. It bases this judgement on a supposed consensus about these numbers among scientists, policy-makers and a wide range of private organisations. However, as I have pointed out previously, reaching 1.5? may be a pipedream and uncertainty abounds.
The existing uncertainties about numbers should not detract from the strength of the legal logic – it just means that the specific emissions reductions required from Shell, and from other companies in other cases, may fluctuate. However, that a court can order any company to fundamentally change its business model because it constitutes a climate danger should give firms around the world pause to rethink their commitment (or lack thereof) to the low-carbon transition.
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