Court Dismisses Claim Against Directors For Company's Climate Strategy

On May 12, 2023, the High Court of England and Wales (Court) dismissed [PDF] the action by ClientEarth against the directors of Shell plc (Shell) which alleged that the board of directors had breached its fiduciary responsibilities. We discussed this action in a previous article and noted the similarity of the duties owed by directors in Canada to those upon which ClientEarth sought to rely in its claim. While the Court's subsequent decision to dismiss ClientEarth's claim is not binding on Canadian courts, its reasoning may be influential and could discourage climate activists from pursuing similar claims in Canada.

The original action

ClientEarth's action alleged that the board of directors of Shell had breached its fiduciary responsibilities as a result of (i) the board's acts and omissions relating to Shell's climate change risk management strategy as publicly disclosed by Shell and (ii) failing to cause Shell to comply with an order (the Dutch order) made by