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Climate crisis: pressure to change to the power of three for oil companies

Dear readers,

»Court obliges oil company Shell to protect the climate«,
“Climate activists win two seats on Exxon’s board of directors,”
“Chevron Investors Support Plan for Greater Emission Reductions.”

All three headlines are from Wednesday – and because they can seem a little implausible when put together: Yes, they are real (read here, here and here). It’s been a bad week for the traditional business model of some of the world’s largest oil companies.

It has been known for years that burning fossil fuels is responsible for heating the planet, but little has changed for many of the companies that unearth them on a large scale every day. A few green investments here, some promises of future emissions reductions, but nothing more. This week, the pressure to change came in a pack of three.

The intro for the climate triple came on May 18th from the International Energy Agency IEA. In a much-noticed report, the authority, which 15 years ago called for more oil to be extracted because oil was becoming scarce, called for an immediate move away from fossil fuels:

  • Nice As of today, there is likely to be no investment in new fossil fuel supply projects give more.

  • It should no further final investment decisions for new coal power plants to be hit.

  • The on the least efficient coal-fired power plants would have to be shut down by 2030 and the remaining coal-fired power plants that will be in operation through 2040 will be upgraded.

  • It also needs a policy that End sales of new vehicles with internal combustion engines by 2035write the experts.

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On Wednesday, a Dutch court in The Hague passed a historic judgment against the Shell oil company. The court found that this was responsible for CO₂ emissions from its own oil production. The company must therefore reduce its greenhouse gas emissions by 45 percent net by the year 2030, based on the status of 2019. What makes the judgment particularly special is that Shell was called on not to allow damage to occur through further extraction of fossil fuels in the first place, and not for example only to compensate for the destruction that has already occurred. “This is the first lawsuit in Europe that has dealt with the obligations of a multinational company, a forward-looking process. The verdict is groundbreaking, ”said Hamburg lawyer Roda Verheyen to SPIEGEL.

Remo Klinger, lawyer at the Berlin law firm Geulen & Klinger, now sees further lawsuits coming against large corporations, namely all those who are large and relevant to climate protection, »for example from the energy sector, but also from car production that have no credible path to be able to demonstrate accelerated greenhouse gas neutrality «, the lawyer told SPIEGEL. The ruling by the Federal Constitutional Court that recently led to stricter national climate targets in Germany shows that courts are playing an increasingly important role in climate protection. With the ruling in the Netherlands, a global company was legally obliged to protect the climate for the first time, says Verheyen. Which also means: These obligations are enforceable.

A few hours after the court ruling in The Hague, the US oil giant Exxon suffered a defeat from its own ranks. The company’s shareholders voted for two candidates from the small activist hedge fund Engine No. 1 to the board of directors, even though the latter only holds 0.02 percent of the shares in Exxon. Engine No. 1 had urged Exxon to do more climate protection, apparently with the consent of the owners – and against the declared will of CEO Darren Woods.

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The third turning point concerns Chevron, also one of the world’s largest oil companies based in California. With a majority of 61 percent, investors forced the company to step up its efforts to protect the climate. What is new is that, according to the will of its owners, the group should also look at what are known as Scope 3 emissions. These are the greenhouse gases that arise when customers, for example in the form of fuel, burn the Group’s products. This means that the company’s responsibility would no longer only extend to its own oil production, but also to the consequences of the subsequent use of its products.

All three developments underline: Companies that are closing themselves to the energy transition or are too hesitant to tackle it are coming under increasing pressure not only from long-term climate protection projects by governments, but also from courts and their own shareholders. However, decarbonization will not be a sure-fire success. Especially since for large state oil companies, for example in Saudi Arabia, Russia and Latin America, different rules apply. Governments must press ahead with their exit from business – and international agreements, for example on uniform CO2-Taxes and emissions trading.

If you like, I will inform you once a week about the most important things about the climate crisis – stories, research results and the latest developments on the biggest topic of our time. You come to the newsletter subscription here.

Published

Mercury in meltwater

With the global warming and the Arctic in particular, the vast ice sheets of Greenland are melting at a worrying rate. Polar researchers first reported last week that a tipping point could already have been exceeded. In addition to the resulting rise in sea levels, this could have other negative consequences. When analyzing water from three fjords and from meltwater flows from three glaciers in southwest Greenland, geoscientists found unexpectedly high levels of mercury. The quantities were comparable to polluted rivers from Asian industrial regions. It is known that the poisonous metal, which is mainly released when coal is burned, accumulates in the Arctic, for example in permafrost soils. In the case of the inputs from Greenland, however, the researchers assume that they must have a geological origin, since the measured concentrations are far too high for human emissions. In any case, it is likely that with the increasing melting of the Greenland ice sheet, more dangerous mercury will find its way into the Arctic environment and could ultimately end up on our plates via food fish.

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Large subglacial source of mercury from the southwestern margin of the Greenland Ice Sheet
Hawkings et al., 2021
Nature Geoscience

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