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regular-article-logo Tuesday, 07 May 2024

Big setbacks push oil giants to a ‘tipping point’

It is the first time a court ordered a private company to, in effect, change its business practice on climate grounds

Somini Sengupta New York Published 30.05.21, 01:37 AM
Activists of Friends of the Earth rejoicing their victory

Activists of Friends of the Earth rejoicing their victory Twitter/ @foeeurope

A nun, an environmental lawyer, pension fund executives, and the world’s largest asset manager. These were among the unusual collection of rebels who claimed a series of startling victories this week against some of the world’s biggest and most influential fossil fuel companies.

From Houston to The Hague, they fought their battles in shareholder meetings and courtrooms, opening surprising fronts in an accelerating effort to force the world’s coal, oil and gas companies to address their central role in the climate crisis.

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And even as they came with strikingly disparate points of view — corporate shareholders, children’s rights advocates, environmentalists, thousands of Dutch citizens — they delivered a common underlying message: The time to start retreating from the fossil fuel business is no longer in the future, but now.

“These companies are facing pressure from regulators, investors, and now the courts to up their game,” said Will Nichols, head of environmental research at Maplecroft, a risk analysis firm. “That’s a big chunk of society, and it’s not a great look to be pushing back against all of that.”

The most dramatic turning point came in the Netherlands, where a court instructed Royal Dutch Shell, the largest private oil trader in the world and by far the largest company in the Netherlands itself, that it must sharply cut greenhouse gas emissions from all its global operations.

It was the first time a court ordered a private company to, in effect, change its business practice on climate grounds.

The symbolism was inescapable: The Netherlands, famously built on land reclaimed from the sea, faces the immediate threat from a warming climate caused by the burning of Shell’s own products — oil and gas.

In another example this week, at the annual shareholder meeting of Exxon Mobil, the biggest American oil company, the message was framed sharply in terms of profits: A tiny new hedge fund led an investor rebellion to diversify away from oil and gas — or risk hurting investors and the bottom line. Chevron’s shareholders voted to tell the company to reduce not only its own emissions, but also, remarkably, the emissions produced by customers who burn its oil and petrol. And in Australia, a judge warned the government that a proposed coal mine expansion, a project challenged by eight teenagers and an 86-year-old nun, would need to ensure that it wouldn’t harm the health of the country’s children.

The timing was significant. This week scientists also concluded that, in the next five years, the average global temperature will at least temporarily spike beyond a dangerous threshold, climbing more than 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, warmer than in pre-industrial times.

Of course, none of these actions represents an immediate threat to the fossil fuel industry.

For a century and a half, the global economy has been fuelled by oil and coal, and that won’t change immediately. Nevertheless, rulings like the one in the Netherlands could be a harbinger for similar legal attacks against other fossil fuel companies and their investors, experts said.

New York Times News Service

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