While Australian politicians languish in a world tarnished by climate change Skepticism and love of fossil fuels, the world’s oil and gas companies have been shaken. Three renowned oil titans – Shell, Exxon Mobil and Chevron – faced a series of decisions in May that promise to significantly shape their future operations. The point is not negligible, given that this triarchy product, between 1988 and 2015, 5% of the total world emissions of scopes 1 and 3.
Royal Dutch Shell was the first giant to be humiliated by a Dutch court decision that it was necessary to reduce total emissions by 45% net of 2019 levels by 2030. “The reduction obligation concerns the entire energy portfolio of the Shell group and the total volume of all emissions (Scope 1 to 3). The case had been brought by a number of environmental groups, including Milieudefensie, claiming that RDS had “the obligation … to contribute to the prevention of dangerous climate change through the company policy it determines for the Shell group ”. Failure to do so would result in a violation of human rights.
The company advanced the rather amoral rationale that not selling its products would simply mean others would do the same. A vain effort was also done to convince Judge Larisa Alwain that RDS was doing enough of its part to tackle climate change by reducing its net carbon footprint comprising direct, indirect carbon emissions and customer emissions for products sold “by 20% in 2035 and 50% in 2050.. “
RDS also asserted that there should be no legal solution to this dispute: policies on climate change ultimately belong to lawmakers and politicians, not judicial officials. These reasons were categorically rejected by the court. The judgment concluded that RDS was “free to decide not to make new investments in exploration and fossil fuels, and to modify the energy package proposed by the Shell group”.
Without facing the wrath of the courts, Chevron was attacking climate change activism from within, encountering a proposal by activist shareholder FollowThis to reduce its Scope 3 emissions by selling reduced amounts of fossil fuels. The measure received the support of 61% of investors. Other voted measures recorded lower but not insignificant figures: 48% of shareholders wanted a report on the impacts of a zero net income in 2050 while the same number also voted for a report on “dark money” lobbying.
One could hardly see this as a measure of mind-boggling ecological fantasy. Investments were potentially at stake. “As shareholders, we understand that this support is part of our fiduciary duty to protect all assets of the global economy from devastating climate change. Climate-related risks are a source of financial risk, and therefore limiting global warming is essential for risk management and responsible management of the economy. Not wishing to be dictators on the issue, the authors of the proposal did not wish to limit “the powers of the company to define and modify its strategy or to take any measure which they believe would contribute in good faith to reduction of GHG emissions ”.
To the two giants facing the headaches of a necessary reform, adds Exxon Mobil. Exxon Mobil CEO Darren Woods failed last month to undo what was described as an “insurrection” at the annual general meeting of shareholders of the company. Engine n ° 1, a small activist hedge fund with a stake of just 0.02% and no history of oil or gas activism, boldly won two seats on the board. This took place, despite the Warning by Woods that voting for such an environmentally conscious concern “would derail our progress and jeopardize your dividend.”
One of the Engine No.1 funders, California State Teachers’ Retirement System, called the vote “Historic”, representing “a tipping point for companies not prepared for the global energy transition”. Climate change was “the greatest threat to our future” and it was up to shareholders “to hold the board of Exxon Mobil accountable for mitigating risk and contributing to the sustainable value of their investments.”
It would have come as a brutal shock to a company with a long history of covering up its own climate change research. In September and October 2015, it was revealed by InsideClimate News, the Los Angeles Times, and the Columbia Graduate School of Journalism that one of the largest oil companies on the planet was well immersed in the study of global warming. His public front was that of skepticism. In 1990, the council claims that “the examination of the matter by society [of global warming] supports the conclusions that today’s facts and the projection of future effects are very unclear.
Despite the terse dismissal, it turned out that engineers and researchers employed by Exxon were working on how best to adjust the company’s approach to rising temperatures. Internal information documents were disseminated and discussed, data generated and analyzed. In 1978, James Black of Exxon’s Product Research Division wrote a discussion paper with the unmistakably relevant title of “The Greenhouse Effect”. This followed his presentation in 1977 to the steering committee. “Current thought holds,” written Black, “This man has a five to ten year window of time before the need to make tough decisions about changing energy strategies becomes critical. “
In 1991, Ken Croasdale, Principal Ice Researcher at Exxon’s Canadian Branch Told an engineering conference according to which “any major development with a lifespan of 30 to 40 years, for example, will have to assess the impacts of potential global warming”. This was particularly relevant to “Arctic and offshore projects in Canada, where warming will clearly affect sea ice, icebergs, permafrost and sea level. Not wanting to bite the hand that feeds it, Croasdale brilliantly took into consideration the advantage that global warming could have for the company’s operations in the Beaufort Sea: “potential global warming can only help reduce exploration and development costs”. This is no longer the case: investors and funds are in revolt and these big oil companies have another set of costs.
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