ClientEarth v Shell plc and the (Un)Suitability of UK Company Law and Litigation to Pursue Climate-Related Goals

In February 2023, ClientEarth filed a derivative claim in the High Court of England and Wales against the Board of Directors of Shell plc for alleged breaches of their duties under the Companies Act 2006. According to ClientEarth, Shell’s Board of Directors has failed to put in place an energy transition strategy consistent with the Paris Agreement, increasing the exposure of Shell plc to climate risks and hindering its long-term commercial viability. This analysis assesses the legal grounds of ClientEarth’s claim in light of the UK’s company law framework, and the High Court’s judgements of May and July 2023 dismissing ClientEarth’s application. It argues that, despite the lack of solid legal grounds for ClientEarth’s derivative claim, this case may serve to advance climate-related goals. More generally, the analysis reflects on how this dispute evidences the growing gap between the objectives of environmental law on the one side and those of company law on the other side.