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ESG responsibilities: Hague Court of Appeal rejects claim for CO₂ reduction by Shell
07.02.2025
European companies are not only faced with more and more ESG (Environmental, Social und Governance) regulations, but also court rulings on cases related to ESG-related topics, as a ruling by the Hague Court of Appeal shows. Board members and supervisory directors now should also be mindful that companies could be held accountable in court for their ESG responsibilities. The Ecovis experts explain what this means for companies.
Companies are increasingly becoming accustomed to obligations arising from the Corporate Sustainability Reporting Directive (CSRD), the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy Regulation. Nevertheless, lawsuits against companies continue to arise because they do not properly deal with ESG responsibilities.
Such claims may be brought, for example, by social organisations advocating ESG interests. A good example is the 2021 landmark decision by a Dutch court ordering Royal Dutch Shell to reduce its CO₂ emissions by 45%. Although that decision was overturned by a higher court in late 2024, it nevertheless contains a serious warning: Shell does have an obligation to take measures against dangerous climate change.
The Shell ruling and its significance for other companies
The Shell ruling caused quite a stir nationally and internationally. In this case, which was brought by the Dutch environmental organisation Milieudefensie (Defenders of the Environment), Greenpeace and others, Shell was ordered to reduce its aggregate annual volume of all CO₂ emissions into the atmosphere by 45% in 2023 compared to 2019 levels.
Following an appeal, this ruling has been overturned: the court of appeal ruled that it does not have the capacity to determine a reduction rate of 45% or any percentage. However, it also ruled that Shell does have an obligation to counter dangerous climate change. Protection against climate change should be considered a human right that can be applied indirectly in private legal relationships by giving substance to open standards, such as the social standard of care. The court notes that it is an established fact that fossil fuel consumption is largely responsible for creating the climate problem and that the responsibility to combat this problem does not lie solely with sovereign states.
We advise you on how to correctly comply with the legal framework of the ESG criteria and develop an appropriate strategy. David Bos, Attorney at law, Partner, Kienhuis Legal – member of EOVIS International, Utrecht, Netherlands
The court is thus of the opinion that companies such as Shell, which contribute significantly to the climate problem and have it within their power to contribute to combating it, have an obligation to limit CO₂ emissions in order to counter dangerous climate change. It is expected that more such cases against companies will follow. The Dutch rulings may serve as a precedent for other jurisdictions.
Board members also targeted by prosecutors
Social organisations are also filing criminal complaints against board members, for example, for polluting the environment. The underlying goal is to encourage the directors to initiate a change in the company’s behaviour. A director will need to seek advice on the relevant legal framework and a strategy to address such developments.
Regardless of the nature and size of a company, it is useful for boards and supervisory directors to proactively consider these developments. It makes sense for companies to formulate and comply with a climate policy in a timely manner. This does not mean that all risks are eliminated. However, it shifts potential discussions to whether the measures taken can be considered sufficient.
The ruling of the Hague Court of Appeal
You can read more about the court’s reasons for its decision concerning Shell’s CO2 reduction here:
Luxembourg: A Leading Hub for Efficient Entity Management
05.02.2025
Luxembourg has solidified its position as a top jurisdiction for entity management, ranking 2nd fastest globally in the Mercator Entity Management Report 2024. The country’s regulatory transparency, digital infrastructure, and skilled workforce make it an attractive destination for multinational companies.
Published by Mercator® by Citco, the report assesses 180 jurisdictions based on the time and cost required to complete corporate secretarial activities. Unlike survey-based rankings, the analysis is built on real-life corporate transactions, offering a reliable benchmark for businesses.
Luxembourg’s business-friendly legal framework and advanced digital solutions, including e-filing, e-signatures, and automated reporting, significantly reduce administrative burdens. The Luxembourg Financial Sector Supervisory Commission (CSSF) plays a pivotal role in ensuring streamlined compliance processes.
Multinationals benefit from harmonized EU regulations, strong cross-border cooperation, and flexible corporate structures. The country’s stable economic and legal environment further enhances its appeal as a premier European business hub.
For companies expanding in Luxembourg, partnering with an experienced audit and advisory firm is crucial. ECOVIS IFG Audit SA provides expert guidance on compliance, financial reporting, and corporate governance, ensuring efficient entity management.
Invest in Tunisia: Reform 2025 and its implications for investors
05.02.2025
Tunisia is starting the 2025 fiscal year with several major economic and fiscal reforms. These include increases to the SMIG (Guaranteed Interprofessional Minimum Wage) and SMAG (Guaranteed Minimum Agricultural Wage), as well as benefits such as tax and customs amnesties. Taxpayers will need to adapt quickly to take advantage of the new measures. The economic and tax reforms are also designed to make it easier for companies to invest. The Ecovis experts explain the new regulations.
Increases to SMIG and SMAG in two phases
Decrees nos. 419 and 420 of 9 July 2024, provide for a gradual increase in the SMIG and the SMAG. The first phase applies retroactively to 1 May 2024, while the second phase will take effect from 1 January 2025:
With technical bonus: up to TND 22.36 dinars for skilled workers.
Creation of an unemployment insurance fund
Article 17 of the 2025 Finance Act introduces a 1% increase in social security contributions to fund a new unemployment insurance fund:
General regime: Increases from 25.75% to 26.75% (17.07% employer contribution and 9.68% employee contribution).
Fully exporting companies: Increases from 25.25% to 26.25%.
Tax, social, and customs amnesties
Several amnesties have been announced:
Social amnesty: Penalties for late payment of social security contributions will be waived, provided that debts are settled before 31 March 31 2025.
Tax amnesty: Total reduction of late payment penalties for tax returns filed by 20 June 2025, subject to payment of the principal tax.
Customs amnesty: Applicable to offenses detected before 1 December 2024, with staggered payment conditions until 1 January 2026.
Are you affected by the complexity of Tunisia's 2025 economic reforms? We will help you navigate the new tax laws, labour regulations and investment incentives. Khalil Sabbagh, Managing Partner, ECOVIS KDH Partners, Tunis, Tunisia
New corporate tax rates
Starting in 2025, companies will have to apply the new corporate tax rates to their 2024 profits:
20% for the majority of sectors.
40% for banks, financial institutions (excluding payment institutions), and insurance and reinsurance companies.
Tax exemption for new businesses
Article 33 of the 2024 Finance Act exempts companies created in 2024 and 2025 from income tax and corporate tax for a period of four years. 2025 will be the last year to benefit from this tax advantage.
New electronic procedures and cheques
Withholding tax certificates: From 1 January 2025, taxpayers will be required to use a dedicated electronic platform to prepare certificates.
Cheque regulations: From 2 February 2025, old cheque formats will no longer be valid, in accordance with Law No. 2024-41.