With climate litigation on the rise globally, an important question is the extent to which companies may owe private law duties in relation to the harmful effects of climate change. Although Canadian courts have shown increased willingness to hold governments to account, private liability in this area remains uncertain under Canadian law.
The 2021 case Milieudefensie et al. v. Royal Dutch Shell was considered by climate activists to be a landmark victory on this point in the international context, with The Hague District Court finding that Royal Dutch Shell plc (“Shell”) owed a duty of care to Dutch citizens in relation to climate change. Shell was ordered to reduce its net emissions by 45% by 2030, as compared to 2019 levels.
But on November 12, 2024, The Hague Court of Appeal allowed Shell’s appeal, quashing the District Court’s judgment. Although the Court of Appeal agreed with Milieudefensie that, as a result of a “social standard of care” under Dutch law, companies have an obligation to mitigate climate change — the Court of Appeal found that it could not hold Shell to any particular reduction percentage, and dismissed Milieudefensie’s claims.
The Milieudefensie case exemplifies the complexities of climate litigation, as well as its shifting battlegrounds. Courts have slowly grown more comfortable with the justiciability of climate issues, and may now be more open to finding that such issues are appropriate for judicial intervention, in addition to government action. Thus, The Hague Court of Appeal recognized a general duty of care owed to Dutch citizens, alongside regulatory obligations.
However, The Hague Court of Appeal did not crystallize this duty in any specific reduction target on the materials before it.
In considering this issue, The Hague Court of Appeal accepted the broad scientific consensus that a net 45% global emissions reduction is needed by 2030. However, it concluded that it could not determine “what specific reduction obligation” applied to Shell, given that the 45% reduction standard was an “average for all sectors and for all places in the world”, as well as in relation to all greenhouse gases, and as such was not sufficiently “case specific”. For example, The Hague Court of Appeal noted the possibility that certain activity, such as supplying gas to a company that previously obtained energy from coal, could increase Shell’s scope 3 emissions (i.e. indirect emissions of Shell’s suppliers and consumers), but on balance lead to lower global CO2 emissions.
The Hague Court of Appeal also accepted Shell’s argument that a scope 3 reduction obligation would be, in any event, an ineffective measure in reducing global emissions. In essence, Shell argued that it could meet a 45% reduction target by reducing its trade in third-party fossil fuels — but that fossil fuel producers would simply continue to supply those fuels, and customers would continue to use those fuels, such that total CO2 emissions would not actually decrease. The Hague Court of Appeal concluded that Milieudefensie had “no interest” in its claim, since the reduction target it sought would ultimately be ineffective.
What does the Milieudefensie case mean for Canadians? As we have previously detailed, the duty of care recognized in Milieudefensie is highly dependent on Dutch law, and similar actions will face major hurdles in Canada. However, it is interesting to consider Milieudefensie alongside Mathur v. Ontario, 2024 ONCA 762, a recent landmark case on the constitutionality of the Ontario government’s greenhouse gas emission reduction target and plan. Although the cases are distinct in that Mathur is premised on governmental, and not private, liability, they each consider how to give concrete dimension to legal duties in relation to climate change. In contrast to Milieudefensie, the Mathur applicants are not asking the court to order the Ontario government to set any particular emissions reduction target — rather, the Mathur applicants seek an order that a “science-based” target be set by the government. The Ontario Court of Appeal was satisfied that such a remedy was sufficiently precise, and noted past examples of Canadian governments being required to determine for themselves what measures would be constitutionally compliant.
Further, as noted above, courts have become increasingly comfortable with the justiciability of climate claims, notwithstanding their enormous complexity. In Mathur, the Court of Appeal endorsed the application judge’s finding that judicial intervention may be appropriate even when issues are “complex, contentious and laden with social values”. However, as the Milieudefensie case demonstrates, courts will now grapple with giving precise content to legally recognized duties in this context.
And the Milieudefensie case continues to unfold — Milieudefensie has announced that it will appeal to The Hague Supreme Court, arguing that The Hague Court of Appeal should have “set a specific, measurable reduction percentage", and that “[h]ow other companies are behaving” is irrelevant to the case. The Hague Supreme Court’s ruling, which is expected in 2026, is likely to address these issues, significantly shape the future of corporate climate accountability, and reinforce the role of litigation in driving climate action.
