Big oil is reeling from a triple blow this week as activists rode a wave of climate change concern to push for stronger emissions controls. Within 24 hours, Chevron, ExxonMobil and Shell were all hit with actions aimed at slashing each company's carbon footprint.
Chevron and ExxonMobil, the second- and third-most-polluting oil and gas companies in the world according to the Climate Accountability Institute, both suffered setbacks during annual meetings held yesterday.
Chevron was forced to accept a shareholder resolution compelling the company to reduce its Scope 3 emissions, which are those caused by the consumption of its products, not just from its internal corporate operations.
“Chevron is taking action to reduce the carbon intensity of its operations and assets,” the firm stated in a press release.
ExxonMobil, meanwhile, saw environmental, social and corporate governance-focused shareholder group Engine No. 1 take two seats on the company board.
Politico reported that the oil giant, which touts its emissions reduction plans prominently on its website, had spent $35 million to avoid the boardroom assault but was unable to do so after asset management behemoth BlackRock backed Engine No. 1.
Ian Thomas, managing director of the energy-focused merchant bank Turquoise International, said in an interview that the move is significant because “these people are in it for the money. They’re looking at it in a very hard-headed way.”
But perhaps the most significant of yesterday’s challenges to the oil and gas industry was when British-Dutch major Shell lost a court case brought by Friends of the Earth Netherlands along with six other organizations and 17,000 citizen co-plaintiffs.
The ruling requires Shell to slash its carbon emissions by 45 percent in a decade's time, including its Scope 3 emissions. The decision is “game-changing,” said Gerard Reid, partner and co-founder of the corporate finance advisory firm Alexa Capital, in an email.
“This is a turning point in history," Roger Cox, lawyer for Friends of the Earth Netherlands, said in a press release. "This case is unique because it is the first time a judge has ordered a large polluting corporation to comply with the Paris climate agreement.”
Shell said it would appeal the decision and defended its record on climate change.
“We are investing billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables and biofuels,” said Harry Brekelmans, Shell’s projects and technology director, in a video statement.
“We want to grow demand for these products and scale up our new energy businesses even more quickly. Urgent action is needed on climate change, which is why we have accelerated our efforts to become a net-zero emissions energy company by 2050.”
But Georgia Whitaker, fossil-free revolution lead campaigner at Greenpeace Netherlands, which partnered with Friends of the Earth in the case against Shell, noted that 80 percent of Shell’s investments are still in oil and gas.
“Shell mentions ‘using lower-carbon energy products to reduce greenhouse gas emissions,’ but the company’s plans include growing its fossil gas business by 20 percent in the coming years,” Whitaker told Canary Media in an email. “Whilst [Shell] believes its oil production peaked in 2019 and will decline slightly, by 1 percent to 2 percent per year until 2030, the company wants to grow its fossil gas operations until this [accounts for] over half of Shell’s energy business by 2030.”
Thomas at Turquoise International said the events of this week sent out “a strong message” and were “a milestone” along a long journey that is “becoming inevitable” for the oil and gas sector.
In a sign of the times, the climate-related setbacks experienced by big oil yesterday contrasted with jubilation among renewables backers the day before, after the Biden administration announced moves that could begin the process of opening up California’s coastline for offshore wind development.
“We are thrilled that we finally have a partner in Washington, D.C.,” said Joseph Fiordaliso, president of the pro-wind New Jersey Board of Public Utilities, at a U.S. offshore wind conference on Wednesday.
Also on Wednesday, Ford Motor Co. reaffirmed its shift to electric vehicles, announcing a plan to invest $30 billion through 2025 in an effort to shift 40 percent of its global vehicle sales to electric models by 2030.
Ford, which made a splash with the introduction of the battery powered F-150 Lightning pickup truck last week, has followed U.S. competitor General Motors and overseas automakers in committing to phasing out carbon-emitting vehicles, a shift that will reduce demand for oil companies’ products.
(Article image courtesy of Carl Nenzen Loven)
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