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Business and Human Rights Update
We are witnessing a legal avalanche relating to business and human rights. Our Business and Human Rights Updates will keep you informed of the latest developments in this area. We are tracking new tools to enable businesses to identify and effectively address potential harm to people and the environment. Ultimately, what protects people is also what best protects our businesses.
Last week saw another groundbreaking court ruling, obliging Shell to reduce CO2 emissions, with the court referencing the expectation that companies respect human rights as set out in the UNGPs. Plus, a Norwegian mandatory human rights due diligence law will be passed before summer.

On 24 May, the Hague District Court ordered Royal Dutch Shell to reduce the group’s CO2 emissions by net 45 percent by 2030, compared to 2019 levels.

  • The last Update noted the German Constitutional Court’s partial rejection of the Climate Act on the grounds of fundamental human rights. Human rights were also at the heart of the December 2019 Urgenda ruling, in which the Dutch Supreme Court required the Dutch government to improve its climate action plans to protect the human rights of Dutch inhabitants to life, private life, family life, home, and correspondence. In both cases, the courts determined that human rights set a limit to government action or passivity. While in last weeks’ ruling, the Hague District Court essentially applies a similar argument to private entities: a company fails to meet a standard of care if its actions pose a substantial threat to fundamental human rights.

  • The court found the following undisputed: the global CO2 emissions of the Shell group and its value chain (i.e. Scope 1-3) will significantly contribute to climate change if they continue in line with current corporate policies; climate change will have serious and irreversible consequences for current and future Dutch inhabitants and residents of the Wadden region, including the right to life and respect for private and family life; and that Shell is therefore not upholding the standard of care required under the Dutch Civil Code. Consequently, the court requests Shell to implement corporate policies in line with targets corresponding to Shell’s proportion of those reductions that according to “widely endorsed consensus” are required to limit global warming to 1.5°C. It is worth highlighting a few of the court’s reasonings:

    • The court explicitly refers to the UN Guiding Principles on Business and Human Rights (UNGPs) in interpreting the meaning of a corporate standard of care. Establishing that it is ”an authoritative and internationally endorsed soft law instrument […]”, the Court ascertains that “Due to the universally endorsed content of the UNGP, it is irrelevant whether or not [Shell] has committed itself to the UNGP […]”;

    • The court dismisses the argument that Shell’s pace of transition should be allowed to follow society’s demands. The court reiterates that the global standard of expected corporate conduct set out in the UNGPs exists, regardless of whether States uphold or fail to uphold their duty to protect human rights;

    • The court concludes that the Shell group has “an obligation of results” in respect of its own emissions and a “significant best-efforts obligation” for emissions from its value chain, including Scope 3 (end-users of products produced and traded by the Shell group which, according to Shell’s own 2018 reporting, represents 85 percent of Shell group emissions); and

    • The court accepts that its decision will likely have “far-reaching consequences” for Shell, deeming that the need to avoid serious risks to Dutch inhabitants and residents of the Wadden region outweighs Shell’s commercial interests.

  • It remains to be seen whether this far reaching District Court ruling will survive the appeal to be launched by Shell. Read Shell’s comment on the court ruling here.
One step closer to a new Norwegian law on mandatory human rights due diligence and transparency obligations
  • This Update has previously summarised a proposal by the Norwegian government to introduce a new law on mandatory human rights due diligence and transparency.

  • On 27 May, The Standing Committee on Family and Cultural Affairs of the Norwegian Parliament submitted its recommendation to Parliament to adopt the government’s proposal – so stay tuned.
If you have questions or want to discuss any of these issues, you can always reach out to your existing contacts at the firm. You are also welcome to contact the members of our Corporate Sustainability and Risk Management team, some of whom are listed at the bottom of this page. 

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Erica Wiking Häger, Partner, erica.wiking.hager@msa.se
Malin Helgesen, Specialist Counsel, malin.helgesen@msa.se
Peter Linderoth, Partner, peter.linderoth@msa.se
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