Rechtbank Den Haag, 26-05-2021, ECLI:NL:RBDHA:2021:5339, C/09/571932 / HA ZA 19-379 (engelse versie)

Milieudefensie was founded on 6 January 1971 as the Raad voor Milieudefensie. Article 2 paragraph 1 and 2 of its articles of association are as follows:

“1. The object of the association is contributing to the solution and prevention of environmental problems and the conservation of cultural heritage, as well as striving for a sustainable society, at the global, national, regional and local level, in the broadest sense of the word, all of which in the interest of the association members and in the interest of the quality of the environment, nature and the landscape, in the broadest sense, for current and future generations.”

2. The association endeavours to attain its objects by: critically monitoring all those developments in society which affect the environment, nature, the landscape, and sustainability, influencing decision-making through using all appropriate and legitimate means, conducting research or having research conducted, disseminating and issuing information in the broadest sense, obtaining legal decisions, and performing all acts and actions the association deems necessary for attaining its objects.”

Greenpeace Nederland was founded in 1979. It works together with Greenpeace organizations established elsewhere. Article 4 paragraph 1 and 2 of its articles of association are as follows:

“1. The object of the foundation is promoting the conservation of nature.

Fossielvrij NL was established on 22 March 2016. Article 3 paragraph 1 and 2 of its articles of association are as follows:

“3.1 The object of the foundation is as follows:

Promoting, protecting, supporting and accomplishing – at the local, regional and national level – social, environmental and economic justice and health for current and future generations by removing the social legitimacy of coal, oil and gas companies (so-called “fossil companies”) and effectuating the alternative use of investments and resources in order to expedite the transition to a sustainable economy which is based on renewable energy.

The articles of association of the association Waddenvereniging, established in 1965, state the following in Article 3 paragraph 1 and 2:

“1. The association strives for the conservation, restoration and proper management of the landscape and the environment and of the ecological and natural history values of the Wadden area, including but not limited to the northern sea-clay area, the Wadden islands, the Wadden Sea and the North Sea as irreplaceable and unique nature reserves. The association also aims to promote interest in these areas. The understanding that man forms part of the ecosystem is the foundation of the association’s actions.

2. The association endeavours to attain its object through all appropriate means, including:

– developing, effectuating and promoting activities for the protection of the ecological, environmental and cultural-historical value of and in the Wadden area, and standing up against activities that could harm the Wadden area;

– lobby activities and conducting legal actions;

(...)”

Both Ends was founded in 1986. Article 2 paragraph 1 and 2 of its articles of association are as follows:

“1. The object of the foundation is:

contributing to and promoting a responsible nature and environmental management across the globe, and also all that is connected, indirectly or directly, to this or which may be conducive to the foregoing, in the broadest sense of the word.

Jongeren Milieu Actief was founded in 1990. Article 3 paragraph 1 and 2 of its articles of association are as follows:

“1. The object of the association is: striving for a better environment by:

ActionAid was founded in 1997. Article 2 paragraph 1 and 2 of its articles of association are as follows:

“1. The object of the foundation is:

 Contributing to the fight against poverty and injustice all over the world. Africa is an area of special focus.

 Creating awareness and increasing the understanding among the public of the causes, effects and reasons for poverty and injustice.

 Inducing policymakers to effectuate change in order to guarantee the rights of vulnerable and poor people.

(...)”

CO2 is the primary greenhouse gas which, together with other greenhouse gases, traps the heat emitted by the earth in the atmosphere. This is known as the greenhouse effect, which intensifies as more CO2 ends up in the atmosphere. This in turn increasingly warms the earth. The climate system has a delayed response to the greenhouse gas emissions: the warming effect of greenhouse gases which are emitted today will only become apparent in thirty to forty years’ time. Other greenhouse gases are, inter alia, methane, nitrous oxide and fluorinated gases. The unit ‘parts per million’ (hereinafter: ppm) is used to express the concentration of greenhouse gases in the atmosphere. There is a direct, linear link between man-made greenhouse gas emissions, in part caused by the burning of fossil fuels, and global warming. The temperate of the earth has now increased

by about 1.1oC relative to the average temperature at the beginning of the Industrial Revolution. Over the past decades, global CO2 emissions have increased by 2% per year.

The global effects of climate change are apparent from the reports of the Intergovernmental Panel on Climate Change (hereinafter: IPCC), the United Nations climate panel (see hereinafter under 2.4.4.).

In AR4 (IPCC Fourth Assessment Report, 2007), the IPCC explained that dangerous, irreversible climate change occurs if global warming exceeds 2oC. The report states that in order to have a more than 50% chance (‘more likely than not’) that the 2oC is not exceeded, the report explains that the concentration of greenhouse gases in the atmosphere has to stabilize at a level of about 450 ppm in 2100.

AR5 (IPCC Fifth Assessment Report, 2013-2014) describes that there is ‘likely’ (> 66%) chance for the rise in global temperature to remain below 2°C if the concentration of greenhouse gases in the atmosphere stabilizes at about 450 ppm in 2100. Stabilization at about 500 ppm in 2100 yields a chance of more than 50% (‘more likely than not’) of reaching the 2oC target. Only a limited number of studies have looked into scenarios that lead to a limitation of global warming to 1.5oC. Such scenarios are based on concentrations of under 430 ppm in 2100. In report AR5, the IPCC has categorized the key risks associated with anthropogenic climate change into five reasons for concern (RFC):

The following are the key risks associated with the RFCs:

“i) Risk of death, injury, ill-health, or disrupted livelihoods in low-lying coastal zones and small island developing states and other small islands, due to storm surges, coastal flooding, and sea level rise. [RFC 1-5]

ii) Risk of severe ill-health and disrupted livelihoods for large urban populations due to inland flooding in some regions. [RFC 2 and 3]

iii) Systemic risks due to extreme weather events leading to breakdown of infrastructure networks and critical services such as electricity, water supply, and health and emergency services. [RFC 2-4]

iv) Risk of mortality and morbidity during periods of extreme heat, particularly for vulnerable urban populations and those working outdoors in urban or rural areas. [RFC 2 and 3]

vi) Risk of loss of rural livelihoods and income due to insufficient access to drinking and irrigation water and reduced agricultural productivity, particularly for farmers and pastoralists with minimal capital in semi-arid regions. [RFC 2 and 3]

vii) Risk of loss of marine and coastal ecosystems, biodiversity, and the ecosystem goods, functions, and services they provide for coastal livelihoods, especially for fishing communities in the tropics and the Arctic. [RFC 1, 2, and 4]

viii) Risk of loss of terrestrial and inland water ecosystems, biodiversity, and the ecosystem goods, functions, and services they provide for livelihoods. [RFC 1, 3, and 4]”

2.3.5.1. The SR15 report (IPCC Special Report on the impacts of global warming of 1.5°C, 2018) describes that the risks identified by the IPCC have increased:

“There are multiple lines of evidence that since AR5 the assessed levels of risk increased for four of the five Reasons for Concern (RFCs) for global warming to 2°C (high confidence). The risk transitions by degrees of global warming are now: from high to very high risk between 1.5°C and 2°C for RFC1 (Unique and threatened systems) (high confidence); from moderate to high risk between 1°C and 1.5°C for RFC2 (Extreme weather events) (medium confidence); from moderate to high risk between 1.5°C and 2°C for RFC3 (Distribution of impacts) (high confidence); from moderate to high risk between 1.5°C and 2.5°C for RFC4 (Global aggregate impacts) (medium confidence); and from moderate to high risk between 1°C and 2.5°C for RFC5 (Large-scale singular events) (medium confidence).” ⁴

2.3.5.2. In the SR15 report, the IPCC concludes that global warming will probably reach 1.5°C between 2030 and 2052 if the increase continues at the current level. Climate-related risks for man and nature will be higher than now with global warming at 1.5°C, but lower at 2°C. The risks hinge on the extent and rate of global warming, geographic location, development and vulnerability levels, and of choices in and implementation of adaptation and mitigation options. In order to limit global warming to 1.5°C, the report states that global emissions will have to have been reduced to far below 35 Gt Co2-eq by 2030. The IPCC also points out that half of the models used show that global emissions should be reduced to between 25 Gt and 30 Gt Co2-eq in 2030. The report states that, as a result of these findings, limiting global warming to 1.5°C requires a net reduction of 45% in global CO2 emissions in 2030 (bandwidth 40-60%) relative to 2010, and a net reduction of 100% in 2050 (bandwidth 2045-2055):

“In model pathways with no or limited overshoot of 1.5°C, global net anthropogenic CO2 emissions decline by about 45% from 2010 levels by 2030 (40–60% interquartile range), reaching net zero around 2050 (2045–2055 interquartile range). For limiting global warming to below 2°C CO2 emissions are projected to decline by about 25% by 2030 in most pathways (10–30% interquartile range) and reach net zero around 2070 (2065–2080 interquartile range). Non-CO2 emissions in pathways that limit global warming to 1.5°C show deep reductions that are similar to those in pathways limiting warming to 2°C. (high confidence).” ⁵

2.3.5.3. The SR15 report also states the following:

“All pathways that limit global warming to 1.5°C with limited or no overshoot project the use of carbon dioxide removal (CDR) on the order of 100–1000 GtCO2 over the 21st century. CDR would be used to compensate for residual emissions and, in most cases, achieve net negative emissions to return global warming to 1.5°C following a peak (high confidence). CDR deployment of several hundreds of GtCO2 is subject to multiple feasibility and sustainability constraints (high confidence). Significant near-term emissions reductions and measures to lower energy and land demand can limit CDR deployment to a few hundred GtCO2 without reliance on bioenergy with carbon capture and storage (BECCS) (high confidence).” ⁶

2.3.5.4. The SR15 report indicates with respect to the nationally determined contributions (NDCs) of the parties to the Paris Agreement that the NDCs are insufficient for limiting global warming to 1.5°C and that the target is only feasible if global CO2 emissions start to fall well before 2030:

“Estimates of the global emissions outcome of current nationally stated mitigation ambitions as submitted under the Paris Agreement would lead to global greenhouse gas emissions in 2030 of 52–58 GtCO2-eq yr−1 (medium confidence). Pathways reflecting these ambitions would not limit global warming to 1.5°C, even if supplemented by very challenging increases in the scale and ambition of emissions reductions after 2030 (high confidence). Avoiding overshoot and reliance on future large-scale deployment of carbon dioxide removal (CDR) can only be achieved if global CO2 emissions start to decline well before 2030 (high confidence).” ⁷

Europe

All parts of Europe will encounter the adverse effects of climate change. Individual citizens and companies will run a substantial financial risk as a result of these impacts.⁸ As a result of climate change Europe is expected to face more frequent heat waves, which will last longer and become more intense and result in more deaths.⁹ Human systems and ecosystems in Europe are vulnerable to climate change, but vulnerabilities will differ per region. The following applies to North-Western Europe:

“Coastal flooding has impacted low-lying coastal areas in north-western Europe in the past and the risks are expected to increase due to sea-level rise and an increased risk of storm surges. North Sea countries are particularly vulnerable, especially Belgium, Denmark, Germany, the Netherlands, and the United Kingdom. Higher winter precipitation is projected to increase the intensity and frequency of winter and spring river flooding, although to date no increased trends in flooding have been observed.” ¹⁰

The Netherlands

The Netherlands has relatively high per capita CO2 emissions compared to other industrialized countries. The impacts of global warming (globally about 0.8 degrees higher than pre-industrial temperatures and 1.7 degrees in the Netherlands) are already noticeable in the Netherlands.¹¹ Heat waves, drought, floods, damage to ecosystems, threat to food production and damage to health are expected to intensify in future if the global average temperature rises. According to the Royal Netherlands Meteorological Institute (KNMI)¹², in the future the Netherlands will have to take account of higher temperatures, a faster rising sea level, wetter winters, heavier precipitation and chances of drier summers. The KNMI states the following, inter alia:

“In climate science it is accepted that a large degree of global warming will increase the risk of a major abrupt transition in the climate system. However there is as of yet no firm quantitative basis for the direction and magnitude of such a transition. Therefore, developing such transitions into extreme scenarios is beyond the scope of KNMI’14. Nevertheless, some examples have been provided below. Some climate models indicate a slow but complete shut down of the warm Gulf Stream before 2100. This reduces the warming over Europe in all but one of these models, in which the Gulf Stream shuts down around 2050 and Europe even sees a temporary net cooling. A few models indicate an abrupt decline in Arctic sea-ice cover during warming scenarios, resulting in a strong temperature increase over the North Pole area. This may impact the formation of storms that affect Europe. Another effect featured in some climate models is a much stronger drying of the soil in southern Europe. This ‘desertification’ of the Mediterranean will favour easterly winds over the Netherlands, leading to very warm and dry summers. There are two other relevant processes that are either not included or not well represented in current climate models. The first is a collapse of the West Antarctic ice sheet. At present this ice sheet is losing mass by increased iceberg calving. Once a collapse has been initiated, for which no indications exist at present, the mass loss might be much greater than accounted for in the KNMI’14 sea-level rise scenarios. The second process is the possibility of remnants of tropical hurricanes hitting Europe. Observations show that over the last two decades Atlantic hurricanes form more often in the eastern Tropics compared to the Caribbean. A large proportion of these hurricanes move directly to the north, and travel to Western Europe. The chances of Atlantic hurricanes to form in the eastern Tropics will increase due to global warming, and therefore also the probability of remnants of hurricanes hitting Western Europe. New experiments performed by KNMI with a highly detailed climate model have confirmed this. It will result in an earlier and more severe storm season in the Netherlands.” ¹³

The UN Climate Convention

In 1992 the UN Climate Convention (a framework convention) was concluded. This convention has since entered into force and ratified by the majority of the global community, including the Netherlands. The convention seeks to protect the planet’s ecosystems and mankind and strives for sustainable development for the protection of current and future generations. The preamble to the convention contains the following consideration, inter alia: “Determined to protect the climate system for present and future generations”. Article 2 of the convention reads as follows:

“The ultimate objective of this Convention and any related legal instruments that the Conference of the Parties may adopt is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.”

The IPCC

The UNEP

The 2019 UNEP Production Gap Report focuses on the so-called production gap. This gap is the difference between the planned production of fossil fuels of countries and global production levels in line with global warming limited to 1.5°C or 2°C. The following conclusion was drawn in this report, inter alia:

“In aggregate, countries’ planned fossil fuel production by 2030 will lead to the emission of 39 billion tonnes (gigatonnes) of carbon dioxide (GtCO2). That is 13 GtCO2, or 53%, more than would be consistent with a 2°C pathway, and 21 GtCO2 (120%) more than would be consistent with a 1.5°C pathway. This gap widens significantly by 2040.

(...)

Oil and gas are also on track to exceed carbon budgets, as countries continue to invest in fossil fuel infrastructure that “locks in” oil and gas use. The effects of this lock-in widen the production gap over time, until countries are producing 43% (36 million barrels per day) more oil and 47% (1,800 billion cubic meters) more gas by 2040 than would be consistent with a 2°C pathway.” ¹⁷

Below is a diagram of the production gap¹⁸:

The Paris Agreement

The decision of the parties to adopt the Paris Agreement notes the following about non-state stakeholders:

“The Conference of the Parties

(...)

117. Welcomes the efforts of non-Party stakeholders to scale up their climate actions, and

encourages the registration of those actions in the Non-State Actor Zone for Climate

Action platform;

(...)

133. Welcomes the efforts of all non-Party stakeholders to address and respond to climate

change, including those of civil society, the private sector, financial institutions, cities and

other subnational authorities;

134. Invites the non-Party stakeholders referred to in paragraph 133 above to scale up

their efforts and support actions to reduce emissions and/or to build resilience and decrease

vulnerability to the adverse effects of climate change and demonstrate these efforts via the

Non-State Actor Zone for Climate Action platform referred to in paragraph 117 above;”

The International Energy Agency (IEA)

The IEA has published its annual World Energy Outlook since 1977. It offers analyses and insights into developments in the energy market and what these developments signify for energy certainty, environmental protection and economic developments.

In its World Energy Outlook 2019, the IEA foresees that the demand for oil and natural gas will rise until 2040 across all scenarios outlined in the outlook. The IEA distinguishes three scenarios, namely the Current Policies Scenario, the Stated Policies Scenario and the Sustainable Development Scenario (SDS). The IEA explains these scenarios as follows in the World Energy Outlook 2019:

“ The Current Policies Scenario shows what happens if the world continues along its present path, without any additional changes in policy. In this scenario, energy demand rises by 1.3% each year to 2040, with increasing demand for energy services unrestrained by further efforts to improve efficiency. While this is well below the remarkable 2.3% growth seen in 2018, it would result in a relentless upward march in energy-related emissions, as well as growing strains on almost all aspects of energy security.

The Stated Policies Scenario, by contrast, incorporates today’s policy intentions and targets. Previously known as the New Policies Scenario, it has been renamed to underline that it considers only specific policy initiatives that have already been announced. The aim is to hold up a mirror to the plans of today’s policy makers and illustrate their consequences, not to guess how these policy preferences may change in the future.

In the Stated Policies Scenario, energy demand rises by 1% per year to 2040. Low-carbon sources, led by solar photovoltaics (PV), supply more than half of this growth, and natural gas, boosted by rising trade in liquefied natural gas (LNG), accounts for another third. Oil demand flattens out in the 2030s, and coal use edges lower. Some parts of the energy sector, led by electricity, undergo rapid transformations. Some countries, notably those with “net zero” aspirations, go far in reshaping all aspects of their supply and consumption. However, the momentum behind clean energy technologies is not enough to offset the effects of an expanding global economy and growing population. The rise in emissions slows but, with no peak before 2040, the world falls far short of shared sustainability goals.

The Sustainable Development Scenario maps out a way to meet sustainable energy goals in full, requiring rapid and widespread changes across all parts of the energy system. This scenario charts a path fully aligned with the Paris Agreement by holding the rise in global temperatures to “well below 2°C ... and pursuing efforts to limit [it] to 1.5°C”, and meets objectives related to universal energy access and cleaner air. The breadth of the world’s energy needs means that there are no simple or single solutions. Sharp emission cuts are achieved across the board thanks to multiple fuels and technologies providing efficient and cost-effective energy services for all.”

In the World Energy Outlook 2020, published in October 2020, the IEA introduces the ‘Net Zero Emissions by 2050 (NZE2050) case’, which is a translation of a net zero scenario in 2050 for the energy sector. The IEA notes the following, inter alia:

“Decisions over the next decade will play a critical role in determining the pathway to 2050. For this reason, we examine what the NZE2050 would mean for the years through to 2030. Total CO2 emissions would need to fall by around 45% from 2010 levels by 2030, meaning that energy sector and industrial process CO2 emissions would need to be around 20.1 Gt, or 6.6 Gt lower than in the SDS in 2030.” ²⁰

The outlook contains the below graph, entitled ‘Energy and industrial process CO2 emissions and reduction levers in WEO 2020 scenarios, 2015-2030’²¹:

The European Union (EU)

The Netherlands

In its 2019 submission to the CDP, RDS writes that its CEO has ultimate responsibility for the general management of the Shell group. The CEO is the most senior individual who is ultimately accountable for all management, except with respect to matters falling under the ultimate responsibility of the RDS Board or which belong to the domain of the RDS shareholders’ meeting. With respect to climate change, the following is stated in the submission to the CDP:

“The CEO is the most senior individual with accountability for climate change. This includes the delivery of Shell ́s strategy, e.g. through Shell ́s plans (...) to set short-term targets for reducing the Net Carbon Footprint of the energy products it sells (...).”

The 2019 CDP submission explains that the climate policy, for which the RDS CEO bears ultimate accountability, is adopted by the RDS Board, which has ‘oversight of climate-related issues’. Among its ‘governance mechanisms into which climate-related issues are integrated’ are ‘Setting performance objectives; Monitoring; implementation and performance of objectives; Overseeing major capital expenditures, acquisitions and divestitures; Monitoring and overseeing progress against goals and targets for addressing climate-related issues’. The RDS Board seeks the advice of a so-called Board-level committee, namely the Corporate and Social Responsibility Committee (CSRC). The role of the CSRC is as follows:

“(...) to review and advise the Board on Shell's strategy, policies and performance in the areas of safety, environment, ethics and reputation against the Shell General Business Principles, the Shell Code of Conduct, and the HSSE & SP Control Framework. Conclusions/recommendations made by the CSRC are reported directly to the Executive Committee and Board. The topics discussed in depth included personal and process safety, road safety, the energy transition and climate change, Shell’s Net Carbon Footprint ambition, the Company’s environmental and societal licence to operate, and its ethics programme.”

The 2019 submission to the CDP also states the following:

“Climate change and risks resulting from GHG emissions have been identified as a significant risk factor for Shell and are managed in accordance with other significant risks through the Board and Executive Committee. Shell's processes for identifying, assessing, and managing climate-related issues are integrated into our overall multi-disciplinary company-wide risk identification, assessment and management process. Shell frequently monitors and assesses climate-related risks looking at different time horizons; short (up to 3 years), medium (three years up to around 10 years) and long term (beyond around 10 years). Shell has a climate change risk management structure in place which is supported by standards, policies and controls.

(...)

Finally, we assess our portfolio decisions, including divestments and investments, against potential impacts from the transition to lower-carbon energy. These include higher regulatory costs linked to carbon emissions and lower demand for oil and gas. The portfolio changes we are making reduce the risk of having assets that are uneconomic to operate, or oil and gas reserves that are uneconomic to produce because of changes in demand or CO2 regulations.”

In 1988, the then Shell group published an internal report on climate change, which had been drawn up in 1986, entitled ‘The Greenhouse Effect’. In it, and in the information film, ‘Climate of concern’, the then Shell group warned about the dangers of climate change. In a brochure with the title ‘Climate Change, what does Shell think and do about it’ from March 1998, the following is stated about the role of the then Shell group in changing energy markets:

“They must play their part in the necessary precautionary measures to limit greenhouse gas emissions.

Shell companies expect to do the following:

(...)

Reduce emissions of greenhouse gases in their own operations as well as helping their customers to do the same.”

In 1998, a new branch, known as the Shell International Renewables, was created in the then Shell group, whose focus was on new forms of energy, including solar energy, the planting of forests, and energy from biomass.

In December 2017, RDS presented its ‘Net Carbon Footprint Ambition’ (NCF ambition) for the Shell group. The NCF ambition is a long-term ambition with which the Shell group seeks to reduce the CO2 intensity of the energy products sold by the group by 2050. It is an intensity-based standard which focuses on the Shell group’s relative contribution to the emissions reduction in the total energy system. The NCF ambition pertains to a reduction of the CO2 intensity of Scope 1, 2 and 3 emissions. The NCF ambition is generally adjusted very five years. In 2019, RDS also started to use targets, in addition to ambitions, for the short term for the Shell group, such as a specific NCF target. The short-term targets will be established every year for a period of three to five years. RDS annually reports on the NCF ambition in its Sustainability Report. The website of the Shell group also states the following about the NCF ambition:

“Our ambition depends on society making progress to meet the Paris Agreement. If society changes its energy demands more quickly, we intend to aid that acceleration. If it changes more slowly, we will not be able to move as quickly as we would like. Both energy demand and energy supply must evolve together. This is because no business can survive unless it sells things that people need and buy.” ²⁶

In 2018, RDS published the Sky Report containing the ‘Sky’ scenario (hereinafter: Sky) for the development of future energy systems. RDS uses this scenario, inter alia, to support and test its business decisions. Sky assumes that society will reach net zero emissions by 2070, which means that the target of the Paris Agreement of keeping the global average temperature rise well below 2°C will have been met. Sky assumes a swift growth of renewable energy sources, such as wind and solar, and of low-emission fuels, such as biofuels, in addition to a persisting demand for oil and gas in the long term. Sky also foresees a substantial increase of a method for capturing and re-using CO2, known as Carbon Capture Utilization and Storage (CCUS), to further limit CO2 emissions in the atmosphere. Sky assumes that even in a climate-neutral energy system, with net zero CO2 emissions in 2070, fossil fuels – if combined with CCUS – still constitute 22% of the total energy supply, of which oil and gas form 16%. In 2050, this could be 45%, of which oil and gas form 33%. The report also states the following:

“From 2018 to around 2030, there is clear recognition that the potential for dramatic short-term change in the energy system is limited, given the installed base of capital across the economy and available technologies, even as aggressive new policies are introduced.”

In 2018, RDS published the Energy Transformation Report 2018, which was intended to answer questions of shareholders, governments and not-for-profit organizations about the significance of the energy transition for the Shell group. The report states, among other things, that in all scenarios used by RDS, including the Sky scenario, the demand for oil and natural gas will be higher in 2030 than in 2018 and:

“To meet that demand, we expect to make continued investments in finding and producing oil and gas.”

The report also states that the Shell group also invests in other energy sources, such as hydrogen, biofuels and wind, and that the Shell group wants to lower the CO2 intensity of its products.

The report states the following regarding the risk of so-called ‘stranded assets’:

“LOW RISK OF STRANDED ASSETS

Every year, we test our portfolio under different scenarios, including prolonged low oil prices. In addition, we rank the break-even prices of our assets in the Upstream ²⁷ and Integrated Gas businesses to assess their resilience against low oil and gas prices. These assessments indicate that the risk of stranded assets in the current portfolio is low.

At December 31, 2017, we estimate that around 80% of our current proved oil and gas reserves, will be produced by 2030 and only around 20% after that time. Production that is already on stream will continue as long as we cover our marginal costs.

We also estimate that around 76% of our proved plus probable oil and gas reserves, known as 2P, will be produced by 2030, and only 24% after that time.”

The disclaimer at the end of the Energy Transformation Report 2018 states the following:

“Additionally, it is important to note that Shell’s existing portfolio has been decades in development. While we believe our portfolio is resilient under a wide range of outlooks, including the IEA’s 450 scenario (World Energy Outlook 2016), it includes assets across a spectrum of energy intensities including some with above-average intensity. While we seek to enhance our operations’ average energy intensity through both the development of new projects and divestments, we have no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years. Although, we have no immediate plans to move to a net-zero emissions portfolio, in November of 2017, we announced our ambition to reduce the Net Carbon Footprint of the energy products we sell in accordance with society’s implementation of the Paris Agreement’s goal of holding global average temperature to well below 2°C above pre industrial levels. Accordingly, assuming society aligns itself with the Paris Agreement’s goals, we aim to reduce our Net Carbon Footprint, which includes not only our direct and indirect carbon emissions, associated with producing the energy products which we sell, but also our customers’ emissions from their use of the energy products that we sell, by 20% in 2035 and by 50% in 2050.”

In October 2018, the CEO of RDS said the following in a speech:

“Shell’s core business is, and will be for the foreseeable future, very much in oil and gas, and particularly in natural gas [...] people think we have gone soft on the future of oil and gas. If they did think that, they would be wrong.”

The RI Annual Briefing 2020 contains the following warning (‘Definitions and cautionary note’), inter alia:

“Additionally, it is important to note that as of April 16, 2020, Shell’s operating plans and budgets do not reflect Shell’s net-zero emissions ambition. Shell’s aim is that, in the future, its operating plans and budgets will change to reflect this movement towards its new net-zero emissions ambition. However, these plans and budgets need to be in step with the movement towards a net-zero emissions economy within society and among Shell’s customers. Also, in this presentation we may refer to “Shell’s Net Carbon Footprint”, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions but, to support society in achieving the Paris Agreement goals, we aim to help and influence such suppliers and consumers to likewise lower their emissions.”

At the presentation of the third-quarter figures, on 29 October 2020, RDS gave a brief explanation of the Shell group’s strategic direction during the presentation of the third quarter figures. Its strategic direction is as follows:

“Shell will reshape its portfolio of assets and products to meet the cleaner energy needs of its customers in the coming decades. The key elements of Shell’s strategic direction include:

▪ Ambition to be a net-zero emissions energy business by 2050 or sooner, in step with society and its customers.

▪ Grow its leading marketing business, further develop the integrated power business and commercialise hydrogen and biofuels to support customers’ efforts to achieve net-zero emissions.

▪ Transform the Refining portfolio from the current fourteen sites into six high-value energy and chemicals parks, integrated with Chemicals. Growth in Chemicals will pivot to more performance chemicals and recycled feedstocks.

▪ Extend leadership in liquefied natural gas (LNG) to enable decarbonisation of key markets and sectors.

▪ Focus on value over volume by simplifying Upstream to nine significant core positions, generating more than 80% of Upstream cash flow from operations.

▪ Enhanced value delivery through Trading and Optimisation.”

The website of the Shell group also states the following:

“We have the responsibility and commitment to respect human rights with a strong focus on how we interact with communities, security, labour rights and supply chain conditions.”

(...)

We are committed to respecting human rights. Our human rights policy is informed by the UN Guiding Principles on Business and Human Rights and applies to all our employees and contractors.”

In an open letter to the shareholders dated 16 May 2014, RDS wrote the following:

“We are writing this letter in response to enquiries from shareholders regarding the “carbon bubble” or “stranded assets” issue [...] there is a high degree of confidence that global warming will exceed 2°C by the end of the 21st century [...] because of the long-lived nature of the infrastructure and many assets in the energy system, any transformation will inevitably take decades [...] Shell does not believe that any of its proven reserves will become “stranded” as a result of current or reasonably foreseeable future legislation concerning carbon.”

Since 2016, the Dutch NGO Follow This, shareholder in RDS, has submitted various resolutions with the request to exchange the investments of the Shell group in oil and gas for sustainable energy. The RDS Board has consistently recommended its shareholders to vote against these resolutions for being contrary to the company’s interests. The RDS Board stated the following, among other things:

“tying the Company’s hands to a renewables only mandate would be strategically and commercially unwise.”

The majority of shareholders has voted against these resolutions.