Big Oil seems to be on thin ice, as courts are blaming companies for climate change, and shareholders insist they shift their focus toward renewable energy. Last week, a Dutch court ordered Royal Dutch Shell to cut its emissions by 45% by 2030, and major shareholder upsets arose in Chevron and ExxonMobil.
Judge Larisa Alwin agreed that Royal Dutch Shell has “an unwritten standard of care” regarding both the Paris climate agreement and human rights. Alwin’s decision is not the final word but will likely affect worldwide climate litigation. How Royal Dutch Shell will react, if held to this standard, is unclear. Royal Dutch Shell Chief Executive Ben van Beurden said earlier last month, “Reducing absolute emissions at this point in time is predominantly possible by shrinking the business,” according to Reuters.
Chevron’s shareholders meeting didn’t go according to Big Oil’s plans, either. Sixty percent of the shareholders voted that Chevron should reduce its emissions in its consumer products as well as its production processes. So far, oil companies have mostly dealt with pressure to cut emissions by focusing on production, rather than the end product, which is the cause of most emissions.
At Exxon’s annual shareholder meeting, a small investment firm called Engine No. 1 staged a major coup. Engine No. 1 only owns 0.02% of Exxon, but it won two seats on the company’s board of directors. A third seat is still up in the air at the time of writing.
Last year was hard on Big Oil, with demand dropping due to worldwide pandemic lockdowns. People are thinking more about climate change and emissions from burning fossil fuels. Large investment companies such as BlackRock are taking stands on the climate. Electric vehicles are on the upswing. Last week’s developments could be the beginning of a whole new direction for major oil and gas companies.
Sierra Club is one of many environmental groups that has long worked to hold Big Oil accountable for its part in climate change. Ben Cushing, a senior campaign representative leading Sierra Club’s financial advocacy campaign, intends to keep cranking up the pressure. “Starting now, in 2021, [the industry] can’t be investing in new fossil fuel projects,” Cushing said, as reported by Vox. “For BlackRock and Vanguard and other investors, they need to hold the leadership of those companies accountable, and vote against their top management.”
Image via Elise Aldram