Shell games: dodging lawsuits and greenwashing charges on both sides of the Atlantic

In 2021, a court in the Netherlands, where Shell was long been headquartered, ordered this leading historical global polluter to drastically change tactics and begin reducing emissions, immediately. Since then, Shell has moved their HQ to the UK and is enjoying record profits while announcing plans to reduce investments in renewables. Undaunted, Civil Society continues taking aggressive action. In February 2023, Global Witness lodged a greenwashing complaint against Shell to U.S. authorities, a tactic also used by NGO ClientEarth. Recently an advertising board in the UK ordered Shell ads off the airwaves for making false environmental claims. How can legal action force Shell to actually change course? In this edition of the Shell Games series (read part 1 and part 3), lead blogger and podcaster Michael Buchsbaum reviews a few of the mounting legal challenges being brought against this oil and gas behemoth.

Rotterdam Beginnings

In 1902 the Royal Dutch Petroleum Co. built a refinery in Rotterdam, on the river running to the nearby North Sea. The facility would eventually become the company’s main crude processing terminal fed by oil flowing in from the company’s distant concessions on the island colony of Sumatra, in modern-day Indonesia.

Five years later, to compete with the American juggernaut Standard Oil (now Exxon), the Dutch company merged with an English competitor run by brothers Marcus and Samuel Samuel, who’d developed a new type of ship to carry crude in bulk. The brothers named each tanker in their growing fleet after kinds of seashells—an homage to their father’s import-export business.

Rotterdam’s port evolved into Shell’s biggest terminal, the port into the biggest in Europe and the city of Rotterdam prospered like never before.

But modern prosperity has largely created an ever-growing eruption of carbon dioxide pollution unleashed by the world’s largest energy firms.

According to a study by the Corporate Governance Institute, since 1965 just 20 companies are alone responsible for 35% or more of the total energy related carbon dioxide and methane billowing into the atmosphere, about 500 billion tons worth.

Lucky number seven on this toxic list is Royal Dutch Shell (Shell) with an estimated 32 billion tons of greenhouse gas emissions historically — and rising, fast.

Landmark ruling against Shell

In May 2021, in a case brought by environmental organisation Milieudefensie, aka Friends of the Earth Netherlands, on behalf of more than 17,000 co-plaintiffs, successfully argued in Dutch court, not far from Shell’s Rotterdam global headquarters, that the company had long been aware of the dangerous consequences of CO2 emissions for decades, and that its plan to reach certain climate targets as it continued to produce more fossil fuels did not go nearly far enough.

In their decision, a three judge panel ruled that Shell had to cut all of its emissions (including its Scope 1, 2 and 3 emissions) — by 45% before the end of 2030 and not two decades later.

For more about this precedent setting decision, click here and here.

Months after losing the case, while filing an appeal to the court and arguing that it shouldn’t be expected to succeed where governments have so far failed, Shell moved its headquarters to the U.K., effectively outside EU tax law.

Nevertheless, since then, Shell’s emissions trajectory has shifted. But much of the company’s progress here has come from selling off older oil wells and refineries in the U.S., Denmark and Germany to other producers. While that moves these emissions off Shell’s books, it doesn’t eliminate them.

Additionally, Shell is also saying emissions are falling since they are focusing increasingly on fossil gas production and LNG shipping – both of which they claim are less climate harming compared to burning oil.

The company is also growing into a major actor in evolving (and very climate risky) “clean” blue hydrogen and carbon capture and storage schemes that they say could make the burning of fossil fuels nearly emissions-free – without much evidence.

Greenwashing all over the place

But Shell is, after all, a past master in massaging the numbers.

Demonstrating that a significant portion of Shell’s spending on Renewables and Energy Solutions was really being directed towards the marketing and trading of fossil gas and gas-fired electricity, the Environmental Campaign group Global Witness petitioned the U.S. Securities and Exchange Commission (SEC), the nation’s financial watchdog, to investigate Shell for misleading investors and greenwashing.

“Given that gas is neither renewable nor an energy solution” Global Witness is calling on the SEC to investigate Shell’s misleading claims that overstate its energy transition efforts in part by including polluting fossil gas as part of its “renewable and energy solutions”.

According to the International Panel on Climate Change, fossil gas is the third most carbon-intensive method of generating electricity.

Additionally, the UN Environment Program says methane, the primary component of fossil gas, is responsible for more than a quarter of the global warming the world is today suffering.

According to Global Witness, just 1.5 per cent of Shell’s total expenditure of $19.7 billion in 2021 was invested into wind and solar power generation.

SEC action on this complaint would be the first application of long-standing US investor protection laws against any fossil fuel company for misleading investors on climate-related claims.

On the other side of the Atlantic, the UK’s Advertising Standards Authority, the agency responsible for maintaining advertising standards, has also taken action to ban some of Shell’s advertisements on greenwashing grounds, finding that recent TV and YouTube ads misled the public on the climate and environmental benefits of the groups’ overall products overall.

These ads, the ASA says, had “omitted material information” by promoting their “green” offers and plans, such as renewable energy and net zero goals, without any mention of their larger polluting operations, and as such were “misleading.”

Their finding turned on the fact that “large-scale oil and gas investment and extraction comprised the vast majority of [Shell’s] business model in 2022 and would continue to do so in the near future”, yet the ads in question gave the opposite impression, the ASA said.

Regulators in the UK, EU and US that police advertising, competition and financial markets are turning more of their attention to climate-related disclosures. Legal and climate experts expect the heightened scrutiny to translate into a growing number of legal cases to challenge potentially misleading claims or breaches of fiduciary duties.

Caroline Lucas, a Green party MP in the UK, said greenwashing ads had been “allowed to disseminate fake fossil-fuel news for far too long.”

“Fossil fuel giants like Shell can’t greenwash their way out of the climate emergency,” she continued. “Their glitzy advertisements can no longer conceal their climate criminal behaviour – polluting the planet, raking in record profits, and sanitising their own image to continue the climate-wrecking cycle.”

When Shell’s lawyers punched back at the ASA, regulators simply cited Shell’s own 2021 Sustainability Report, which showed its operations produced a vast amount of greenhouse gas emissions equivalent to over 1,375m tonnes of carbon dioxide.

In the next edition of the Shell Games series, we’ll look at other lawsuits emerging against Shell worldwide.


The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views or positions of the Heinrich-Böll-Stiftung.


L. Michael Buchsbaum is an energy and mining journalist and industrial photographer based in Germany. Since the mid-1990s, he has covered the social, environmental, economic and political impacts of the transition from fossil fuels towards renewables for dozens of industry magazines, journals, institutions and corporate clients. Born in the U.S., he emigrated to Germany and Europe to better document the Energiewende. He is also the host of The Global Energy Transition Podcast.

Leave a Reply

Your email address will not be published. Required fields are marked *