European Investors Sue Shell's Board Over Climate Mismanagement

A group of European institutional investors is backing a novel London lawsuit against energy giant Shell's board over alleged climate mismanagement in a case that could have far-reaching implications for how companies tackle emissions, Reuters reported.

Photo Insert: The case comes two years after Shell was ordered to slash carbon emissions in a landmark Dutch climate case.

ClientEarth, an environmental law charity turned activist Shell investor, said it had filed a High Court claim, alleging Shell's 11 directors have failed to manage the "material and foreseeable" risks posed to the company by climate change – and that they are breaking company law.

"We hope the whole energy industry sits up and takes notice," said Mark Fawcett, Nest's chief investment officer. If judges allow the action to proceed, it could encourage investors in other companies, including those funding carbon emitters, to litigate against boards that fail to adequately manage climate-related risks, experts say.

The case comes two years after Shell was ordered to slash carbon emissions in a landmark Dutch climate case. Shell investors are not the only ones questioning the energy sector over climate issues this week.

Norway's $1.35 trillion wealth fund said it would step up its engagement with companies over the management of climate risk by voting against board members who it deems are not doing enough on the issue.

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