Shell PLC: a green light to continue or a signal to go green?

Research methodology The case and the accompanying teaching note are based entirely on secondary research. Information has been sourced from publicly available materials, including news articles, industry reports, company filings, press releases, court documents and sustainability disclosures. These sources were carefully selected to ensure accuracy, relevance and diversity of perspectives. The case does not involve any primary interviews or confidential data. Case overview/synopsis In November 2024, Shell won an appeal in the Hague Court of Appeal, overturning a 2021 landmark ruling that had ordered the company to reduce its global greenhouse gas emissions by 45% by 2030 (Fair Change, 2024). The court ruled that there was no clear legal basis to enforce such a specific target on a private company, citing the absence of consensus on a global “social standard of care” (Holligan, 2024). However, it affirmed Shell’s “special responsibility” as a major oil and gas producer to address climate change (Kaminski, 2024). The case began in 2019, when Milieudefensie (Friends of the Earth Netherlands), supported by over 17,000 coplaintiffs, sued Shell for breaching its duty of care and violating human rights by contributing to climate damage (Milieudefensie et al., 2019). In 2021, the Dutch district court sided with Milieudefensie, holding Shell accountable for emissions across its entire value chain – including Scope 3 emissions – and ordering deep cuts in alignment with the Paris Agreement (Booth, 2021). The ruling was widely seen as a watershed moment in climate litigation. Shell’s successful appeal lifted its legal obligation to meet the original emissions reduction target. Yet, the company now stood at a crossroad. Should CEO Wael Sawan interpret this legal victory – and the global political backsliding on climate commitments – as a license to stay the course with its fossil fuel-based operations? Or should he use this window to lead a strategic pivot toward cleaner energy, anticipating long-term regulatory, investor and societal pressures? And if he did choose to pursue a greener path, another critical question followed: Should Shell be the “First One Out” – scaling back investments in upstream oil and gas, downsizing that division and returning value to shareholders through dividends and share buybacks? Or should it adopt a Planned Transformation strategy – gradually reducing its reliance on oil and gas while simultaneously building out a competitive, revenue-generating renewable energy business? (Caldecott et al., 2018). Complexity academic level This case is suited for courses on Strategic Management, Sustainability, Corporate Social Responsibility and Business Ethics. It can be used in upper-level undergraduate, graduate (MBA/EMBA) and executive education programs.