Activist investors and NGOs leaving regulators in their wake
Earlier this month, the High Court dismissed the claim that environmental charity ClientEarth had brought against the directors of Shell.
The claim had been touted as a “world-first lawsuit” and was backed by institutional investors. It alleged that Shell’s directors had not adopted and implemented an energy-transition strategy aligned with the Paris Agreement, in breach of the Companies Act 2006, thereby posing risks to investors as the world shifts away from fossil fuels.
The is the second action brought by ClientEarth this year and the two claims show a growing trend of litigations brought by NGOs and investors intent of shifting the dial towards net zero, when governments and regulators seem to be lacking teeth.
In this article for International Banker, Joseph Duggin reviews the ClientEarth cases, some of the existing and upcoming ESG legal requirements and what the enforcement landscape looks like. The article also discussed trends in the EU and why businesses should address environmental and supply chain issues head on.