Activist investors sue Shell for not fighting 'climate crisis'; lawsuit demands company change business model to 'cleaner energy'

 A group of institutional investors are suing energy and gas giant Shell for allegedly not properly preparing to shift away from fossil fuels, as reported by Reuters.

Client Earth, investors and activist group in Shell, are taking the board of directors to court over allegations that they are harming the company's future by not properly shifting toward green energy. The environmentalists say it is the company's duty to shift away from fossil fuels and pivot in order to fight the "climate crisis."

"Shell’s Board is legally required to manage risks to the company that could harm its future success, and the climate crisis presents the biggest risk of them all," Client Earth says in a statement regarding the lawsuit.

"Ensuring the company stays competitive in the energy markets of the future, as countries and customers worldwide choose cheaper, cleaner energy, means Shell needs to move away from fossil fuels towards an alternative business model," the group continues, adding that "we’re arguing that the plan Shell’s Board currently has for making that shift is simply unreasonable."

Shell just shared news of record profits a week before, taking in $40 billion due to price increases stemming from the Russian and Ukrainian war.

Shell rejected allegations made by the activist group, claiming its climate targets are on track and in compliance with the law and with shareholders.

"ClientEarth's attempt ... to overturn the board's policy as approved by our shareholders has no merit," a spokesperson said.

Shell plans to reduce its emissions by 20% by 2030, 45% by 2035, and 100% by 2050 from 2016 levels.

However, the plaintiffs claim is that Shell is failing to reduce emissions, which "threatens efforts to protect the planet, further increasing the risk to the company."

"The future consequences of Shell’s flawed climate plans could cause the company’s value to plummet, costing jobs and running the risk of shareholders and investors losing significant amounts of money, including people’s pension funds," the statement concludes.

A group of pension funds have written letters support of the claims against Shell, including "London CIV and Nest, Swedish pension fund AP3, French asset manager Sanso IS, Degroof Petercam Asset Management in Belgium and Denmark's Danske Bank Asset Management and Danica Pension and AP Pension."

The group owns a relatively small portion of Shell's company, making up about 12 million out of 7 billion shares.