An unprecedented lawsuit was filed by Shell shareholders against the company board of directors over the company’s climate strategy.

In a first-of-its-kind lawsuit that could have far-reaching implications for how other companies plan to cut emissions, shareholders of Shell are suing Shell’s directors personally for allegedly failing to adequately manage the risks associated with the climate emergency.

On Thursday, ClientEarth, an environmental law firm, sued the board of directors of a major British oil company in the highest court of England and Wales in its capacity as a shareholder.

It claims 11 directors at Shell are breaking the law by failing to implement an energy transition strategy that is in line with the historic Paris Agreement of 2015.

Institutional investors owning more than 12 million shares in the company are supporting the claim, which is being touted as the first of its kind to seek to hold a board of directors liable for failing to adequately prepare for the energy transition.

Paul Benson, senior lawyer at ClientEarth, said in a statement, “Shell may be making record profits now due to the turmoil of the global energy market, but the writing is on the wall for fossil fuels long term.”

The transition to a low-carbon economy is occurring now and will continue in the foreseeable future. Despite the Board’s legal duty to manage the risks that climate change poses to Shell’s future success, Benson argues that it is continuing with a transition strategy that is fundamentally flawed.

Nest and London CIV of the United Kingdom, AP3 of Sweden, Sanso IS of France, and Danske Bank Asset Management of Denmark are among the investors backing the claim. Institutional investors manage more than $500 billion in assets in the United States.

A representative for Shell said, “We do not accept ClientEarth’s allegations.” It is true that “our directors have complied with their legal duties and have always acted in the best interests of the company.”

ClientEarth’s attempt to overturn the board’s policy as approved by our shareholders through a derivative claim is baseless. We will be filing an opposition to their motion seeking court approval to pursue this claim.

Shell has stated that it is confident that its climate goals are in line with the Paris Agreement on climate change. By 2050, Shell plans to become an emissions-free business.

Although Shell’s Scope 3 emissions (from the products it sells) account for more than 90% of the company’s total emissions, ClientEarth claims that leading third-party assessments have shown that this is not the case.

With the help of reduced greenhouse gas emissions, the Paris Agreement hopes to keep global warming to within 1.5 degrees Celsius above pre-industrial levels. Many people believe that the fight to keep global warming below 1.5 degrees Celsius is crucial because, above that threshold, the likelihood of so-called tipping points increases. These are tipping points where minor modifications can have far-reaching effects on Earth’s life-supporting systems.

Without a doubt, the primary cause of the climate emergency is the combustion of fossil fuels like oil and gas.

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