What a hammering the oil majors took yesterday, reminiscent of Big Tobacco’s choking comeuppance in an American court 15 years ago.
In a single day, investors in the two biggest US oil companies punished Exxon Mobil and Chevron for dragging their feet on taking action to reduce global warming while more significantly in The Netherlands a historic court ruling could reshape how Shell carries outs its business.
Exxon Mobil lost at least two board seats to activist hedge fund, Engine No. 1, yesterday while just over two-thirds of Chevron investors supported a resolution to further reduce its greenhouse gas emissions. Still, in the grand scheme of things Chevron and Exxon’s CEOs will be relieved they’re not in the shoes of their Shell counterpart. A landmark judgment issued by the district court in The Hague said that Shell and its suppliers must cut CO2 emissions by 45% by 2030 from 2019 levels, marking the first time in history a judge has held a corporation liable for causing dangerous climate change in a case originally brought about by NGO Friends of the Earth.
Emboldened by this court victory, NGOs could target shipping next
All three companies will now be under enormous pressure from both shareholders and the wider public to cut emissions, and cut them fast. What’s more, emboldened by this court victory, NGOs could well target other polluting industries, potentially opening the door for class action suits around the world to speed up decarbonisation of the transport sector.