Tristan R. Brown: Apr. 16, 2018 12:44 PM ET
Summary
- A Netherlands environmental NGO has threatened to bring yet another climate change lawsuit against Royal Dutch Shell if it does not fundamentally change its business operations.
- While multinational corporations are constantly being threatened with legal action, this specific one is unique.
- It has the hallmarks of recent climate lawsuits against Shell in the U.S., but would be based in a court system that has mandated stricter climate policy before.
Can non-shareholder private entities force oil and gas companies to accept lower returns on capital? Investors in Royal Dutch Shell (RDS.A) (RDS.B) will receive an answer to this question if an environmental NGO moves forward with a threatened lawsuit in the Netherlands that would require the company to do exactly that.
Notably, Shell recently committed to reducing its greenhouse gas emissions by 50% through 2050 via billions of dollars of investments in renewable energy capacity. The NGO in question, Friends of the Earth Netherlands (aka Milieudefensie), deems this effort insufficient and insists that the company must abandon its oil and gas reserves and be “net zero” (i.e., no net emissions of greenhouse gases) by that date instead. While Shell’s investors largely shrugged off the threat (see figure), if they even noticed it at all, the development represents the opening of a new front in the lawsuits being waged by U.S. municipalities against the company and its Big Oil competitors. read more
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