With Losses In Court, and the Boardroom, and Has Big Oil Jumped the Shark?

May 26, 2021

PBS:

A Dutch court on Wednesday ordered Royal Dutch Shell to cut its carbon emissions by net 45% by 2030 compared to 2019 levels in a landmark case brought by climate activism groups, which hailed the decision as a victory for the planet.

The Hague District Court ruled that the Anglo-Dutch energy giant has a duty of care to reduce emissions and that its current reduction plans were not concrete enough.

The decision could set a precedent for similar cases against polluting multinationals around the world. Activists gathered outside the courtroom erupted into cheers as the decision was read out loud.

“The climate won today,” said Roger Cox, a lawyer for the Dutch arm of Friends of the Earth, which was one of the organizations behind the case.

“This ruling will change the world. Worldwide, people are in the starting blocks to take legal action against oil companies following our example,” Cox added.

The Hague court did not say how Royal Dutch Shell should achieve the ordered cutback, saying the energy giant’s parent company “has complete freedom in how it meets its reduction obligation and in shaping the Shell group’s corporate policy.”

In a written reaction, Shell said it expects to appeal the “disappointing court decision.”

The company said it is already “investing billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables and biofuels. We want to grow demand for these products and scale up our new energy businesses even more quickly.”

At a hearing in December, Shell lawyer Dennis Horeman said a ruling against the company could create a situation “in which countless parties can hold each other accountable for their role in that (energy) transition through the courts” and give judges “a central role in an active and delicate political process.”

Meanwhile, in other news, Exxon stock actually jumped as activist, pro-climate investors elected to its board.

UPDATE: Exxon CEO responds:

New York Times:

Shareholders of Exxon Mobil dealt the company’s management a defeat on Wednesday by electing at least two of four candidates activist investors had nominated to its board — the first time that has happened, according to analysts who follow the company.

The election of the remaining seats was too close to call, according to preliminary results announced by the company.

A coalition of investors concerned about the environment had argued that Exxon had not invested enough in cleaner energy, which will hurt its profits in the future. And a majority of the company’s shareholders appeared to at least partly agree with that position, according to the preliminary results.

The investors have argued that the company should follow European oil companies like BP and Total that have begun investing heavily in renewables like wind and solar energy. Exxon has said it does not make sense for it to pivot to renewables and that it is addressing climate change by focusing on capturing carbon from industrial facilities and storing it deep underground in perpetuity.

The hedge fund leading this campaign, Engine No. 1, was seeking to defeat the election of four of the company’s director candidates and had proposed four of its own. Its victory is a sharp rebuke to Darren W. Woods, Exxon’s chairman and chief executive, and is the culmination of years of efforts by activists to force the oil giant to change its environmental policies and approach. Some big pension funds, including the New York State Common Retirement Fund and the California Public Employees’ Retirement System, had joined Engine No. 1, which was started last year.

“We welcome the new directors,” Mr. Woods said at the meeting. “While there is still more to do, we are proud of the progress we have made to reduce emissions and clear plans for further reductions.”

The two directors nominated by Engine No. 1 who won are Gregory Goff, a former chief executive of Andeavor, a refinery company, and Kaisa Hietala, a former executive at Neste, a Finnish energy company that produces renewable versions of petroleum products, including diesel and jet fuel.

The company’s share price jumped after the preliminary results were announced and were trading about 1 percent higher at 1:30 p.m.

Below, a report from one of the activist shareholders before the actual result was announced. They ended up winning.

2 Responses to “With Losses In Court, and the Boardroom, and Has Big Oil Jumped the Shark?”

  1. rhymeswithgoalie Says:

    I find it weird that, after all of the efforts to get people to de-invest in fossil fuel companies, some group managed to get a majority vote on board memberships of Exxon Mobil.

    Granted, I myself do “spoiler” voting on the stocks I own (e.g., voting FOR a lot of proposals the board recommends against), but I ditched my fossil fuel and FF-adjacent stocks a long time ago.

  2. J4Zonian Says:

    It’s bewildering to me what people are talking about when they talk about oil corporations reducing their carbon emissions. Short of shutting down and not drilling and selling oil any more,, what reductions could they possibly make that mean anything, or that make any difference to our survival? If getting more efficient means they last longer and pay their CEOs more, how is that anything but counterproductive?


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