Climate Litigation against companies

The paper examines how mounting private-sector and shareholder pressure on major fossil fuel companies intersects with civil climate litigation. In 2021, activist shareholders influenced ExxonMobil’s board composition to push for an energy transition, and a majority of Chevron’s shareholders supported a resolution to reduce greenhouse gas emissions, including Scope 3. Most notably, the Hague District Court ordered Royal Dutch Shell to significantly reduce group-wide emissions, including Scope 3. Against this backdrop, the article asks whether and how the Shell decision can act as a catalyst for climate litigation beyond the Netherlands, particularly for actions against companies in Germany. The authors outline the landscape of climate litigation, differentiate vertical (public-law) from horizontal (private-law) actions, summarize the Shell ruling, extract cross-jurisdictional private-law issues, and assess the transposability of the Dutch court’s reasoning to German law.

The paper situates climate litigation within the broader field of climate action and surveys key strands of case law and scholarship. Climate litigation encompasses proceedings addressing causes and consequences of anthropogenic climate change, from project-specific challenges to claims targeting global climate impacts. A typology distinguishes vertical actions (private parties versus the state) from horizontal actions (between private parties). Vertical actions have achieved landmark outcomes such as Urgenda, where the Dutch Supreme Court compelled the state to cut emissions by 25% compared to 1990 by end-2020, and similar suits have progressed in Belgium, with efforts underway in Italy and Poland. In Germany, the Federal Constitutional Court declared parts of the Federal Climate Protection Act unconstitutional in March 2021, prompting further constitutional complaints. Horizontal actions focus on the responsibilities of private emitters and typically invoke tort-based protections of life, health, and property, with fundamental and human rights exerting indirect horizontal effect through interpretation of general clauses. Early US suits against carbon majors largely failed, though a new wave has emerged. In Europe, Germany hosts the Lliuya v. RWE case (a property-protection claim seeking pro rata cost sharing for flood risk mitigation) grounded in § 1004 BGB, while France sees a suit against Total under the 2017 loi de vigilance seeking future emissions reductions to protect the global climate. This body of cases and commentary frames the legal and doctrinal context for the Shell decision’s significance.

The study employs comparative law to evaluate whether the Dutch Shell judgment can inspire horizontal climate actions in other legal systems. This comparative approach is complemented by a doctrinal analysis from the perspective of German private law to assess potential effects on German companies. The authors analyze the Shell court’s reasoning, the applicable conflict-of-laws framework, and transnational private-law issues, and then consider their compatibility with German tort principles and procedural mechanisms.

• The Shell case represents the first successful first-instance horizontal climate action focusing on protection of the global climate rather than a specific project. Plaintiffs included Dutch NGOs (led by Milieudefensie) and 17,379 individuals; the defendant was Royal Dutch Shell plc, the parent company of the Shell group headquartered in The Hague.
• Admissibility: Dutch NGOs were permitted to bring class actions under Art. 3:305a DCC on behalf of present and future generations in the Netherlands; the claims of 17,379 individuals were deemed inadmissible due to insufficiently concrete individual interests relative to the class action.
• Applicable law: Applying Art. 7 Rome II (place of the event giving rise to the damage), the court applied Dutch tort law because Shell’s group-wide management decisions were made in The Hague.
• Liability basis: The court relied on the general tort clause (Art. 6:162 DCC) and derived an unwritten duty of care requiring Shell to reduce group-wide greenhouse gas emissions. The duty of care was constructed by integrating multiple elements: Shell’s group-wide policy control; the group’s attributable emissions; consequences for the Netherlands (including the Wadden region); ECHR rights to life and private/family life; the UN Guiding Principles on Business and Human Rights; Shell’s control over group and business partners’ emissions; necessity of emissions reductions; plausible reduction pathways; energy demand and market/regulatory context; and Shell’s societal role in energy provision.
• Remedy: Shell was ordered to reduce net greenhouse gas emissions by 45% by 2030 relative to 2019, including Scope 3 emissions. The judgment is provisionally enforceable despite Shell’s appeal.
• Cross-jurisdictional issues: The case spotlights key private international law questions for transnational climate claims: forum determination under Brussels Ibis (registered seat, administrative seat, and headquarters; special tort jurisdiction at place of event or damage) and applicable law under Rome II (Art. 4 and 7). The notion that corporate policy decisions constitute the “event giving rise to damage” remains debated; in Shell, this overlapped with general jurisdiction. The global reach of ordered reductions (including foreign subsidiaries and partners) raises complex choice-of-law and enforcement considerations.
• Transposability: From a German law perspective, the Dutch reasoning cannot be transplanted wholesale. Differences in tort doctrine, collective redress mechanisms, and conflict-of-laws treatment, alongside Germany’s existing constitutional climate jurisprudence, constrain direct adoption of the Shell framework.

The findings address the core question of whether the Dutch Shell judgment can catalyze horizontal climate litigation across jurisdictions. The case demonstrates that a court can derive a duty of care from a general tort clause to mandate substantial emissions reductions, including Scope 3, based on a composite of human rights considerations, soft-law standards (UNGPs), scientific reduction pathways, and corporate control over group policies. This provides normative momentum for plaintiffs and courts seeking to frame corporate climate responsibilities in private law. However, the comparative analysis shows that jurisdictional rules (Brussels Ibis), applicable law (Rome II), and the doctrinal structure of national tort law significantly shape litigation pathways and outcomes. In Germany, the indirect horizontal effect of fundamental rights and the contours of general clauses, as well as procedural differences in collective actions, mean that Shell’s approach informs but does not dictate German courts’ analysis. The significance lies in highlighting the feasibility of court-ordered corporate mitigation duties while underscoring the need to tailor arguments to each legal system’s private-law architecture and conflict-of-laws framework.

This article contributes by mapping how the Shell judgment operationalizes a private-law duty of care to reduce corporate greenhouse gas emissions, including Scope 3, and by systematizing cross-jurisdictional issues that will structure future horizontal climate actions. It clarifies admissibility and liability pathways under Dutch law, identifies key private international law touchpoints (forum and applicable law), and evaluates the limits of transplanting the Dutch approach into German private law. Future research should examine: (i) the evolving appellate jurisprudence in Shell and its implications for the scope of corporate duties; (ii) the interaction between corporate law, due diligence statutes (e.g., French loi de vigilance; emerging supply chain due diligence laws), and tort duties; (iii) the treatment of corporate policy-setting as an “event giving rise to damage” under Brussels Ibis and Rome II; and (iv) enforcement and compliance issues for group-wide reduction orders affecting foreign subsidiaries and value chains, especially in light of potential corporate relocations of headquarters and their effect on applicable law.

The analysis is grounded primarily in Dutch and German legal frameworks and on a first-instance judgment that is under appeal, which may limit generalizability. The focus on private-law routes necessarily brackets broader regulatory and legislative avenues. Additionally, while the paper addresses key private international law issues, comprehensive empirical assessment of enforcement across multiple jurisdictions is beyond its scope.