If life were a football match, this is what the score might read after a bad couple of weeks for Big Oil…
It started on 13 May, when Harvard research fellow, Geoffrey Supran, published a searing series of tweets linked to peer-reviewed research on ExxonMobil’s climate change communications. Echoing Michael E Mann’s latest book, The New Climate War, they depict a strategy not just of downplaying the reality and seriousness of climate change, but also of attempting to shift responsibility onto individual consumers.
It then built on 18 May, when the Minderoo Foundation published a new Plastic Waste-Makers Index, which reveals 100 companies collectively responsible for producing 90% of all single-use plastic waste generated globally each year. No great surprise, if you cross reference that list with a Guardian report from 2019, showing the 20 companies collectively responsible for more than a third (35%) of all greenhouse gas emissions in the modern era, there’s a fair amount of crossover. Seven companies who appear in the Guardian list – Abu Dhabi National Oil Company, Chevron, ExxonMobil, PetroChina, Royal Dutch Shell, Saudi Aramco and Total – also appear among the top 50 or so in Minderoo’s (with ExxonMobil, PetroChina, Saudi Aramco and Total appearing in the top 20 for both).
Then came Wednesday last week, which must surely rank as one of the most cataclysmic days for the fossil fuel industry…
Seven environmental groups and 17,000 Dutch citizens went up against Shell in court – and won. Their argument was that Shell has a duty of care to prevent the harm caused by climate change and judges agreed. They ordered the company to comply with Paris Agreement and reduce its emissions by 45% (vs. 2019 levels) by 2030.
A few hours later, more than 60% of shareholders at Chevron voted to demand that the company cut Scope 3 emissions, which include those caused by customers burning its products. As reported by Reuters, although the proposal does not require Chevron to set a target of how much it needs to cut emissions or by when, the move is indicative of growing investor frustration with companies they believe are not doing enough to tackle climate change.
More powerful proof of this frustration came shortly after, as ExxonMobil failed to defend its board against a coup launched by dissident hedge fund activists at Engine No. 1, which successfully replaced two Exxon board members with its own candidates to help drive the company towards a greener strategy.
While all of these developments are significant, the Shell court ruling feels like it could be the most telling of the lot – for reasons neatly set out in the ‘Net Zero Sensemaker’ email from those fine folk at Tortoise Media earlier this week:
- It sets a precedent: Dutch law may not be applicable elsewhere, but human rights laws are. The fact that the complainants won with a human rights argument may empower other climate activists to bring similar cases.
- It could have implications for other corporate polluters: big emitters will have been following the court case closely. The apparent choice they now face: think harder about how to slash emissions quickly or ready yourselves for litigation.
- It’s the first time a company has been ordered to comply with the Paris agreement: Shell tried to argue that the Paris climate goals only apply to countries, but the court found that there has been “broad international consensus about the need for non-state action” for almost a decade now.
- It puts climate before profits: while the judgement acknowledged that dramatically cutting emissions might “curb [Shell’s] potential growth,” it found that the benefits would “outweigh the Shell group’s commercial interests.” In other words, climate targets are more important than Shell’s bottom line.
- It targets emissions by suppliers and customers: the judgement encompasses Scope 3 emissions – aka Shell is responsible for the emissions produced by its petrol station patrons, not just those of its own business operations. Cutting those would require them to change what they sell to consumers.
The times they are a-changing? Certainly looks that way.