This article was co-authored with Joana Setzer, an Associate Professorial Research Fellow at the London School of Economics and Political Science, and co-published on July 6, 2026.
In May 2026, the Supreme Court of the Netherlands reviewed arguments in the significant climate case Milieudefensie v. Shell, focusing on whether Shell is legally required to reduce its greenhouse gas emissions, including Scope 3 emissions from fossil fuels it sells. Shortly after, the Paris Judicial Court decided that TotalEnergies’ vigilance plan, under France’s Duty of Vigilance Act, must include Scope 3 emissions. Meanwhile, the US Securities and Exchange Commission (SEC) proposed rescinding the Climate Risk Disclosure Rule, which mandates companies to disclose their climate-related financial risks to investors.
The deliberations by the Supreme Court of the Netherlands and the Paris Judicial Court, contrasted with the SEC’s proposal, highlight two fronts in the ongoing debate about how companies must account for their climate impacts.
Our recent study, co-authored with colleagues from the Climate Social Science Network and published in the Netherlands International Law Review, explores the evolution of these legal arguments in corporate climate change litigation. We examined twelve ‘corporate framework’ cases globally, where legal actions seek to hold companies accountable for their climate impacts through changes in corporate policies and governance. Our findings are both promising and concerning.
Accountability for Scope 3 emissions
Our research indicates that courts are increasingly recognizing companies’ responsibility for their Scope 3 emissions, though approaches vary across jurisdictions. This is especially significant for fossil fuel companies like Shell and TotalEnergies, as Scope 3 emissions constitute the majority of their climate impact, mainly from the use of their oil and gas products.
Acknowledging responsibility is distinct from establishing a legal obligation for oil and gas companies to reduce these emissions, determining reduction targets, and enforcing these legally. This challenge is evident in the cases of Milieudefensie v. Shell and Notre Affaire à Tous et al. v. TotalEnergies.
The Milieudefensie v. Shell case, filed under tort law, saw the District Court of The Hague in 2021 issue a landmark ruling requiring Shell to cut its greenhouse gas emissions by 45% by 2030, including Scope 3 emissions. This marked the first time any court mandated a company to reduce value-chain emissions. Shell appealed this decision.
In 2024, the Dutch Court of Appeal overturned the specific 45% reduction order for Shell, but affirmed the company’s duty to reduce emissions, including downstream. The court noted the difficulty of translating this duty into a specific percentage due to lack of consensus on what should apply to Shell. This raises questions about the effectiveness of single-company obligations. Now, the Supreme Court of the Netherlands will decide whether specific emissions reductions can be mandated by courts or if they can only declare a general responsibility for action.
In Notre Affaire à Tous et al. v. TotalEnergies, the Paris Judicial Court applied France’s due diligence law. The court’s ruling, particularly significant regarding Scope 3 emissions, mandates that emissions from the downstream use of TotalEnergies’ products be included in the vigilance plan. This expands the duty of vigilance to cover risks linked to the business model, even if emissions are generated by third parties. Researcher Marta Torre-Schaub highlights that the vigilance plan becomes a proactive due diligence tool, rather than merely a reporting requirement.
The International Court of Justice’s 2025 advisory opinion on states’ climate obligations may offer valuable insights into causation and remedies for both French and Dutch courts.
Key questions facing courts in relation to corporate emissions
Our examination of twelve corporate framework cases across various jurisdictions reveals three key questions that courts frequently address regarding corporate emissions:
Do companies have a legal obligation to reduce their Scope 3 emissions?
The prevailing view among courts is that companies do hold such an obligation. The Dutch Court of Appeal in Milieudefensie v. Shell confirmed that international soft law instruments, human rights frameworks, and greenhouse gas accounting standards all imply corporate responsibility for Scope 3 emissions. The Philippines Human Rights Commission reached a similar conclusion during its Carbon Majors inquiry in 2015. Additionally, Australian and Dutch National Contact Points for Responsible Business Conduct, which enforce the Organization for Economic Co-operation and Development’s Guidelines, have issued statements acknowledging that financial institutions are accountable for indirect emissions from their value chains linked to loans and other investments (see Australian Bushfire Victims and Friends of the Earth Australia v. ANZ Bank and BankTrack et al. v. ING Bank).
Can that obligation be translated into a specific reduction requirement?
This remains a challenge for courts, which hesitate to set specific percentages without clear sectoral standards. This is both a scientific and a litigation strategy issue. Our research supports legal and governance expert Phillip Paiement‘s view that instead of relying on a single headline percentage for reducing Scope 3 emissions, future cases might present ‘bundles of duties’ addressing issues like transition-plan quality, production limits, and marketing constraints. This shift moves the focus from specific emissions targets to scrutinizing corporate decisions that drive emissions.
Would such an order be effective?
Companies often argue that court orders to cut their Scope 3 emissions will not decrease global emissions. They cite defenses like ‘market substitution’—if one company sells less oil and gas, another will sell more—and ‘drop in the ocean’—one company’s emissions are too small to impact globally. These defenses receive mixed reactions. In the Netherlands, the Court of Appeal found them persuasive, whereas the District Court did not. In New Zealand, the Supreme Court allowed Smith v. Fonterra, a case brought by a Māori climate change spokesperson against high-emitting New Zealand companies, to proceed, indicating these arguments are not necessarily fatal at the pleading stage.
Strategies for responding to these corporate defenses
The Supreme Court of the Netherlands’ decision, expected in early 2027, could significantly influence global climate litigation. By 2024, twenty corporate framework cases were pending, inspired by the original 2021 ruling mandating Shell’s 45% reduction. A Supreme Court decision reinstating the reduction could invigorate these cases, while upholding the appeal might prompt a reassessment of legal strategies.
Our research suggests several approaches for holding companies accountable through courts:
- Sector-specific evidence: Litigants can present evidence suited to specific sectors and the actual control companies have over their value chains, rather than applying global reduction pathways uniformly.
- Activity-linked obligations: Instead of, or in addition to, percentage targets for emissions reduction, corporate framework cases can seek constraints on specific activities, such as restrictions on new fossil fuel fields, fossil fuel financing, or marketing.
- Transition plan enforcement: The EU’s Corporate Sustainability Due Diligence Directive mandates companies to adopt transition plans with time-bound targets. Courts can ensure the quality of these plans, even if reluctant to set specific targets.
- Precaution and intergenerational equity: These principles can help bridge evidentiary uncertainties, aligning private law duties with protective logic accepted in public law climate cases, such as Urgenda Foundation v. State of the Netherlands, the first successful climate case establishing a government’s legal duty under human rights law to prevent dangerous climate change.
Corporations are fighting disclosure rules
The SEC’s proposal to repeal climate-related financial risk reporting requirements ties directly to the effort to establish corporate liability through courts. Companies cannot be held accountable for emissions they do not disclose.
Currently, companies report greenhouse gas emissions inconsistently, using various methods and transparency levels. Some do not track emissions at all. The Greenhouse Gas Protocol offers guidance, but it is voluntary, leading to the uncertainty courts cite when declining to set specific reduction obligations.
The Climate Risk Disclosure Rule, now facing cancellation, could have standardized how companies report climate risks to investors, including Scope 3 emissions. Yet, strong lobbying from high-emitting industries and trade groups succeeded in removing Scope 3 disclosures from the final rule, highlighting the perceived litigation threat. However, opponents of this rule have only won a battle, not the war, as numerous jurisdictions globally, including California, have adopted standards mandating Scope 3 disclosures.
Without transparent, standardized, and mandatory reporting, claimants face challenges proving causation and foreseeability. The lack of legal liability risk decreases companies’ incentives for accurate disclosure. These dynamics reinforce each other.
Corporate climate litigation: the direction of travel
The cases of Milieudefensie v. Shell and Notre Affaire à Tous et al. v. TotalEnergies go beyond two companies. They are pivotal tests of whether legal systems can hold major corporate emitters accountable for their full climate impact. They also expose vulnerabilities in corporate profit models within the oil and gas sector, as addressing emissions could necessitate selling less carbon-intensive products, leading to fierce corporate resistance.
Both cases may see further developments soon. In early 2027, the Supreme Court of the Netherlands will decide if Shell can be mandated to reduce their Scope 3 emissions by specific amounts. In France, TotalEnergies issued a statement expressing “satisfaction” that the court did not ban new fossil fuel projects or impose production cuts, and noted it would “assess the next steps” following the decision.
Regardless of the outcome, the trend is clear: major companies are increasingly being held accountable for their contributions to global warming and its impacts. As scientists and researchers, our role is to ensure that the science relevant to these issues keeps pace with legal developments, and that both align with the urgent need for action to address the climate crisis.
Joana Setzer is an Associate Professorial Research Fellow at the Grantham Research Institute on Climate Change and the Environment, at the London School of Economics and Political Science (LSE). Her main areas of expertise are climate litigation and global environmental governance.
