Judicial Review One of the most powerful ways of tackling climate change through litigation must include bringing claims which are designed to result in change to government policy with a view to improving environmental outcomes. Back in June 2022, a successful judicial review challenge was brought by two environmental NGOs, which forced the UK Government to revise its ‘net zero’ carbon strategy. However, that is unlikely to be the end of the story: announcements by the UK Government in September 2023 have been widely criticised as watering down previous commitments, which were themselves already viewed by many as being insufficient to enable the UK to meet its climate targets. Claimant NGOs are said to be considering further action. Derivative Actions Oil giant Shell has recently found itself on the receiving end of a claim brought by ClientEarth, an international NGO based in the UK: ClientEarth v Shell Plc and others [2023] EWHC 1137 (Ch). ClientEarth sought, in its capacity as shareholder, to bring a derivative action against Shell’s Board of Directors under s261(1) of the Companies Act 2006, on the grounds that the Board had “failed to promote the success of the company and to act with reasonable care, skill and diligence” because “the Board is breaching those requirements if it is not properly managing climate risk.” This is understood to be the first derivative action brought by a shareholder against the directors of a listed company for allegedly failing to manage climate risk. Among other things, ClientEarth relied on the alleged failure by Shell to comply with an earlier order of the Hague District Court in Milieudefensive v Royal Dutch Shell plc requiring it to cut its CO2 emissions by 45% from their 2019 levels by 2030, in the first ruling making a company legally obliged to align its policies with the Paris Agreement. In the end, ClientEarth failed to SPECIAL FEATURE 41 Special Feature As climate change causes ice sheets to shrink, fires to engulf our forests and seas to warm, so the number of environmental, social and governance (ESG) claims grows, with many cases being found to have direct judicial outcomes which were identified as favourable to climate action. Hannah Sharp, a partner at Rosling King LLP, discusses recent ESG claims, analyses the trends and examines the areas of greenwashing, parent company liability and derivative actions. Green Litigation: Rising Levels of ESG Claims in the Current Climate
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