Scope 3 on trial: what it means for corporate climate accountability

On 25 June, the Paris Judicial Court ruled that oil and gas company TotalEnergies must disclose the climate risks linked to emissions from the use of its products; meanwhile, in the Netherlands, the Supreme Court is deciding whether Shell can be ordered to cut its greenhouse gas emissions. Against this backdrop, Joana Setzer and Delta Merner discuss their research examining how courts around the world are approaching corporate climate accountability.  

In May 2026, the Supreme Court of the Netherlands heard arguments in the landmark climate case of Milieudefensie v. Shell on whether Shell has a civil law obligation to reduce its greenhouse gas emissions, including downstream emissions from the burning of the fossil fuels it sells (Scope 3 emissions). A few weeks later, the Paris Judicial Court ruled that TotalEnergies’ vigilance plan – in which companies must identify, prevent and mitigate environmental and other risks across their operations, under France’s Duty of Vigilance Act – must address Scope 3 emissions. Across the Atlantic, the US Securities and Exchange Commission (SEC) proposed rolling back the Climate Risk Disclosure Rule that requires companies to report their climate-related financial risks to investors.

The legal arguments being weighed by the Supreme Court of the Netherlands and the Paris Judicial Court on the one side, and SEC’s proposal on the other, represent two fronts in the ongoing battle over whether and how companies must account for the full scope of their impacts on the world’s climate.

Our recent research, co-authored with colleagues at the Climate Social Science Network and published in Netherlands International Law Review, examines the evolution of these arguments in corporate climate change litigation. We analysed 12 ‘corporate framework’ cases from around the world – legal cases and complaints seeking to hold companies accountable for their impacts on the climate through changes to corporate policies and governance. What we found is both encouraging and sobering.

Accountability for Scope 3 emissions

Our research shows that courts are increasingly recognising that companies have some responsibility for their Scope 3 emissions, although there are differences in approaches across jurisdictions and courts. For fossil fuel companies, such as Shell and TotalEnergies, this matters enormously. Scope 3 emissions account for the overwhelming majority of their impact on the climate, primarily from customers’ use of their oil and gas products, which typically represent 80–90% of a fossil fuel company’s total carbon emissions.

But recognising responsibility in principle is different from determining that an oil and gas company has a legal obligation to reduce these emissions, agreeing on what the reduction should be and then enforcing a legal obligation in practice. The cases of  Milieudefensie v. Shell and Notre Affaire à Tous et al. v. TotalEnergies illustrate this tension.

The case of Milieudefensie v. Shell was filed under tort law. In 2021, the District Court of The Hague issued a landmark ruling that Shell must reduce its greenhouse gas emissions by 45% by 2030, relative to 2019 levels, including its Scope 3 emissions. This is the first time any court in the world has ordered a company to cut its value-chain emissions. Shell appealed the decision.

In 2024, the Dutch Court of Appeal overturned the specific order for Shell to reduce its emissions by 45% by 2030. However, significantly the court did affirm that companies such as Shell have a duty of care to reduce their emissions, including downstream emissions. The problem, the court said, was translating that general duty into a specific percentage. According to the ruling, there was insufficient consensus on what percentage should apply to Shell specifically. In raising questions about the effectiveness of specific orders to reduce emissions, the court highlighted the challenge of addressing emissions through single-company obligations. Now, the Supreme Court of the Netherlands must decide if courts can order specific emissions reductions or whether they are limited to declaring that companies have a general responsibility to act.

The case of Notre Affaire à Tous et al. v. TotalEnergies, in turn, is based on France’s due diligence law. The Paris Judicial Court’s recent judgement is particularly significant for its treatment of Scope 3 emissions (paras. 151–170). By requiring emissions generated through the downstream use of TotalEnergies’ products to be addressed in the vigilance plan, the court extends the duty of vigilance to risks that are economically and causally linked to the company’s business model, even where the emissions are produced by third parties. As noted by researcher Marta Torre-Schaub, the vigilance plan therefore becomes a forward-looking due diligence instrument designed to anticipate climate-related harm throughout the value chain, not a simple reporting obligation.

The International Court of Justice’s 2025 advisory opinion on the climate obligations of states may provide useful guidance on causation and remedies for both the French and Dutch courts.

Key questions facing courts in relation to corporate emissions

Our analysis of 12 corporate framework cases across multiple jurisdictions reveals three recurring questions that courts grapple with in relation to corporate emissions. These are:

Do companies have a legal obligation to reduce their Scope 3 emissions?

Courts are increasingly taking the view that companies do. The Dutch Court of Appeal in Milieudefensie v. Shell confirmed that international soft law instruments (e.g. recommendations and guidelines), human rights frameworks and greenhouse gas accounting standards all pre-suppose corporate responsibility for Scope 3 emissions. The Philippines Human Rights Commission reached the same conclusion in its Carbon Majors inquiry in 2015. Australian and Dutch National Contact Points for Responsible Business Conduct, which implement the Organisation for Economic Co-operation and Development’s Guidelines, have issued statements recognising that financial institutions are responsible for indirect emissions in their value chains linked to their 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 question has proved more challenging for courts, which have been reluctant to set specific percentages without clear sectoral standards. This is not only a scientific problem; it is also a litigation strategy problem. Our research confirms legal and governance specialist Phillip Paiement’s view that rather than relying on a single headline percentage for reducing a company’s Scope 3 emissions, future cases might present ‘bundles of duties’ that address, for example, transition-plan quality, production limits, rules on no new oil and gas fields, marketing constraints and transition plan requirements. This approach reflects a broader shift away from debating specific emissions targets towards scrutinising corporate decisions that drive emissions.

Would such an order be effective?

Companies routinely argue that court orders to reduce their Scope 3 emissions will not reduce global emissions. Arguments include the ‘market substitution’ defence: if one company sells less oil and gas, another will sell more, and the ‘drop in the ocean’ defence: one company’s emissions are too small to matter globally. These arguments have had a mixed reception. In the Netherlands, the Court of Appeal found them persuasive, but the District Court did not. In New Zealand, the Supreme Court allowed Smith v. Fonterra, a case in which a Māori climate change spokesperson brought a case against seven high-emitting New Zealand companies in the agriculture and energy sectors, to proceed. This signals that these arguments are not necessarily fatal at the pleading stage of a case.

Strategies for responding to these corporate defences

The Supreme Court of the Netherlands’ ruling, which is expected in early 2027, will send ripples through climate litigation worldwide. Twenty corporate framework cases were already pending when the Shell appeal was decided in 2024. Many of these cases drew inspiration from the original 2021 ruling imposing the 45% reduction order on Shell. A Supreme Court decision reinstating that reduction order would energise these cases. A decision upholding the appeal could force litigants to rethink their strategies.

Our research suggests several ways forward for holding companies to account through the courts:

• Sector-specific evidence: Rather than applying global reduction pathways uniformly, litigants can present evidence tailored to specific sectors and companies’ actual control over their value chains.
• Activity-linked obligations: Instead of (or in addition to) percentage targets for reducing emissions, corporate framework cases can seek constraints on specific activities, such as preventing new fossil fuel fields, restrictions on fossil fuel financing or marketing restrictions.
• Transition plan enforcement: The EU’s Corporate Sustainability Due Diligence Directive requires companies to adopt transition plans with time-bound targets. Courts can enforce the quality of these transition plans, even when they are reluctant to set specific targets.
• Precaution and intergenerational equity: These principles can help bridge evidentiary uncertainties, aligning private law duties with the protective logic already accepted in public law climate cases such as Urgenda Foundation v. State of the Netherlands, the world’s first climate case in which citizens successfully established that their government has a legal duty under human rights law to prevent dangerous climate change.

Corporations are fighting disclosure rules

The proposal by the US Securities and Exchange Commission to roll back requirements on companies to report their climate-related financial risks to investors connects directly to the fight to establish corporate liability through the courts. In short, it is not possible to hold companies accountable for emissions they do not disclose.

Companies already report their greenhouse gas emissions inconsistently, using different methods and varying levels of transparency. Some do not track their emissions at all. The Greenhouse Gas Protocol provides guidance, but is voluntary. This creates the uncertainty that courts point to when they decline to set specific reduction obligations.

The Climate Risk Disclosure Rule the SEC is now proposing to cancel could have standardised how companies report climate risks to investors, including Scope 3 emissions. But heavy lobbying by high-emitting industries and their trade associations succeeded in stripping Scope 3 disclosures from the final rule, revealing the litigation threat companies believe this information poses. However, opponents to this disclosure rule have won the battle not the war: dozens of jurisdictions around the world have adopted global standards that require Scope 3 disclosures, including California in the US.

As we can see, without transparent, standardised and mandatory reporting, claimants face uphill battles proving causation and foreseeability. And without the risk of legal liability, companies have less incentive to disclose accurately. These two 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 are about more than two companies. These cases are key tests of whether the legal system can hold major corporate emitters to account for the full scope of their impacts on the climate. They also highlight the vulnerability of corporate profit models in the oil and gas sector, because addressing emissions may require companies to sell less of the carbon-intensive products that drive their revenues. This is why corporate resistance is so fierce.

Both cases might still see developments in the near future. In early 2027, the Supreme Court of the Netherlands will decide whether Shell can be ordered to reduce their Scope 3 emissions by specific amounts. In France, TotalEnergies issued a statement expressing “satisfaction” that the court declined to ban new fossil fuel projects or impose production cuts and that it would “assess the next steps to be taken following the Court’s decision”.

Regardless of the outcome, the direction of travel is clear: major companies are increasingly being held accountable for their global warming emissions and the resulting impacts on the world’s climate. Our job as scientists and researchers is to make sure that the science applicable to these issues keeps pace with the law, and that both keep pace with the urgent action that we need to take to address the climate crisis.