Read our Governance whitepaper and explore why governance is important for the success of any business Read now


A paradigm shift in how society views corporate and director responsibility for climate change has arrived.

A legal case brought by ClientEarth, a Shell shareholder, alleges all of Shell’s directors (both executive and non-executive) are personally liable for the board’s failure to adopt a strategy that “truly aligns” with the 2015 Paris climate agreement.

ClientEarth claim that Shell has violated the UK Companies Act, mismanaged climate risk, failed to live up to the Paris climate agreement standards and fallen legally short of mandated targets. Other Shell shareholders have also voiced their support of the lawsuit including Danske Bank Asset Management and London CIV.

Business leaders should be aware of why this lawsuit is important. While it is relatively common for a company to be sued for corporate failings, directors being sued in their personal capacities is not. Further, this lawsuit is proactive rather than reactive – in other words the case is not being brought because of a specific event or action – ClientEarth are claiming that Shell is falling behind in its environmental strategy.

Shareholder activists are often backed by deep-pocketed litigation funders. This allows them both the means and the incentive to use litigation as a way of shaping environmental, social and governance (ESG) agendas. Businesses that ignore the risks posed by such activists, and fail to take steps to mitigate those risks, do so at the peril of their reputation and share value.

Whether or not this lawsuit is successful is still to be seen. However, business leaders need to be aware of increasing litigation being aimed at them in their personal capacity and the risks this carries both for their businesses and their future careers.

To find out more here


The information included in this article is considered true and correct at the date of publication; changes to rules and regulation made after the time of publication may impact on the accuracy of the information referenced or inferred to in this article. The information in the article may change without notice and Martyn Fiddler Aviation is in no way liable for the accuracy of any information printed or stored or in any way interpreted and used by the user. This article or the information contained in it is not provided or intended to be used as advice of any form.
If you have any doubts or would like to discuss any aspect of this article, please do not hesitate to contact one of our experts who will be happy to discuss your individual circumstance.
About the author

Heather Gordon is Legal Director at Martyn Fiddler Aviation. Heather joined the team in 2013 having previously practiced within a leading Isle of Man law ...

Contact Heather Gordon
  • Innovators in the industry
  • Dedicated team of uniquely qualified individuals
  • There's so much we can help you with.
    Talk to us today