The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sun, 05 Apr 2026 11:30:09 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png What the Shell Judgment Means for US Directors – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 What the Shell Judgment Means for US Directors https://corpgov.law.harvard.edu/2021/07/22/what-the-shell-judgment-means-for-us-directors/?utm_source=rss&utm_medium=rss&utm_campaign=what-the-shell-judgment-means-for-us-directors https://corpgov.law.harvard.edu/2021/07/22/what-the-shell-judgment-means-for-us-directors/#comments Thu, 22 Jul 2021 13:01:19 +0000 https://corpgov.law.harvard.edu/?p=139278?d=20210722090119EDT Posted by Cynthia A. Williams (York University, Robert Eccles (Oxford University), and Ellie Mulholland (CCLI), on Thursday, July 22, 2021
Editor's Note:

Cynthia A. Williams is the Osler Chair in Business Law at Osgoode Hall Law School at York University; Robert G. Eccles is Visiting Professor of Management Practice at Oxford University Said Business School; and Ellie Mulholland is Director of the Commonwealth Climate and Law Initiative. This post was authored by Professor Williams, Professor Eccles, Ms. Mulholland, Sarah Barker, and Alex Cooper.

The recent decision of a Dutch court in Milieudefensie and Ors. v Royal Dutch Shell plc reinforces the expansion of tort law to climate change issues. As this application of tort increases, directors will need to be aware of and manage the increased risks in order to comply with their company law duties. Investors should also adopt a forward-looking approach to managing climate-related liability risks in their portfolios and consider whether to ask questions of investee companies in their stewardship and engagement. 

In May 2021, the Hague District Court ordered Royal Dutch Shell plc (RDS) to reduce the CO2 emissions of the Shell group by 45% by 2030, relative to 2019 levels, across all its value chain emissions (scopes 1, 2 and 3) (Milieudefensie and Ors. v Royal Dutch Shell plc C/09/571932 / HA ZA 19-379). The court found that as a result of the CO2 emissions of the Shell group, certain Dutch citizens would suffer harm, meaning RDS would fail to meet the “unwritten standard of care” in the Dutch Civil Code and fail to act in accordance with the due care exercised in Dutch society. Therefore, the court ruled that RDS must reduce the CO2 emissions of the Shell group through implementing a compliant Shell group corporate policy. The ruling is provisionally enforceable, meaning that Shell must comply with it during any appeal process.

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