Corporate Law Update: 29 July - 4 August 2023

• Published date: 07 August 2023
• Subject Matter: Corporate/Commercial Law, Corporate and Company Law, Directors and Officers, Shareholders, Executive Remuneration
• Law Firm: Macfarlanes
• Author: Mr Dominic Sedghi and Tim Redman

This week:

• A shareholder's attempt to bring proceedings against a listed company's directors for not meeting climate targets once again fails
• Members of a pension scheme were unable to bring proceedings against the corporate trustee's directors for breach of duty
• The Financial Conduct Authority updates its rules on structured electronic reporting
• The UK Government publishes information on its framework for creating new UK sustainability disclosure standards
• The European Commission endorses legislation setting out the specific disclosures required under the new EU sustainability reporting standards
• The London Stock Exchange publishes its Dividend Procedure Timetable for 2024

Court again dismisses shareholder action on climate targets

The High Court has once again dismissed ClientEarth's attempt to bring a derivative claim against the directors of Shell plc.

ClientEarth, a minority shareholder in Shell plc, had alleged that Shell's directors had failed to take appropriate action within Shell's business to address climate change. It attempted to bring proceedings against those directors, on behalf of Shell plc, through a derivative claim.

The judge dismissed ClientEarth's application in May 2023. ClientEarth requested the court to reconsider that decision at an oral hearing. The court has now done this and reached the same conclusion, namely that the application should be dismissed.

This second judgment is principally a consolidation and repetition of the court's initial judgment, and so we will not report on it again in detail, save to note that this once again demonstrates the difficulties shareholders will face in bringing direct claims against directors in relation to climate targets.

Read more about the original judgment dismissing ClientEarth's claim in our previous Corporate Law Update

For more detail, read our colleagues' blog on ClientEarth's failed derivative claim

Read the court's second judgment dismissing ClientEarth's claim

Pension scheme members were unable to bring claim against scheme trustee's directors

The Court of Appeal has dismissed an attempt by two members of a pension scheme to bring proceedings against the directors of the pension scheme's corporate trustee for alleged breaches of duty, including in relation to improper investment in fossil fuels.

Normally, members of a company can seek to bring proceedings against the company's directors for breach of duty under a statutory "derivative claim". However, in this case, the...