Exxon, Shell, and Chevron All Lose Big on Climate Battles

Zero points for Big Oil. A major score for climate activists.

Exxon drilling oil plant

Gregory Smith / Contributor / Getty Images

Wednesday was not a good day for Big Oil. A string of courtroom and boardroom decisions held Shell, Exxon, and Chevron accountable for their carbon emissions.

First up, a landmark decision from a Dutch court ruled in favor of environmentalists, ordering Royal Dutch Shell to cut its carbon dioxide emissions by 45% by 2030 from 2019 levels. That’s right, 45%. 

“This could be game-changing,” wrote Bill McKibben, founder of the grassroots climate campaign 350.org, on Twitter. “A monumental victory,” said Donald Pols of Friends of the Earth Netherlands. “Holy [expletive],” said renewable energy expert Ketan Joshi.

And while it’s always worth scrutinizing the details whenever the term "historic" is being used, it became clear as the day progressed that, for once, this ruling really does have the potential to live up to the hyperbole. Here’s why:

  • It’s legally binding, in The Netherlands at least, and is effective immediately
  • It applies not just to Shell’s own operations, but emissions from the burning of their products too
  • It has the potential to serve as a precedent for other cases around the world

Sara Shaw of Friends of the Earth International described the ramifications in a statement: "This is a landmark victory for climate justice. Our hope is that this verdict will trigger a wave of climate litigation against big polluters, to force them to stop extracting and burning fossil fuels. This result is a win for communities in the global South who face devastating climate impacts now.”

In many ways, it is exactly the kind of legal intervention that Shell was hoping to avoid with its lackluster net-zero efforts. Yet unless the company is successful in appeals (and it has vowed to appeal), this verdict could result in a seismic shift in its investment strategies, oil exploration efforts, and in fact, its entire business model too. 

But Wednesday wasn’t just about Shell. In another potentially explosive result, a tiny activist hedge fund called Engine No. 1 managed to harness investor anger over Exxon’s poor financial results and efforts to delay climate action to oust at least two of the company’s directors. (In a sign that the revolt is both deep and broad, these activists were apparently backed by those well-known anti-capitalists at BlackRock.)

Again, in a world where oil majors tend to get their way, it’s usually worth scrutinizing the details before getting too excited. And yet, folks who tend to watch these things closely were not mincing their words. 

Mark Campanale, founder and executive chair of Carbon Tracker declared in a statement that “investors have sent a shot across the bow of Exxon, but its impact will ricochet across the boards of every major fossil fuel company." Meanwhile, clean energy activist David Pomerantz described the victory as “a different universe of threat” to fossil-fueled business-as-usual. 

As if that was not enough good news for climate activists—or bad news for oil majors—shareholders at Chevron voted 61% in favor of a proposal to cut "Scope 3" emissions, meaning those that result from the burning of its products. 

Javier Blas, chief energy correspondent for Bloomberg News, did not mince his words when summing up the potential significance of the day’s news: 

“It is not often that three of the supermajors are prominently in the headlines within a 24-hour period, but that was certainly the case yesterday,” analysts at Raymond James said in a research note, reports CNBC. “And all three of the headlines — pertaining to Exxon, Chevron, and Shell — shared a common theme: climate risk.”

Meanwhile Brian Kahn—managing editor at Earther—was busy pondering how those oil majors who hadn’t suffered a direct hit were feeling: “Things are *awfully* quiet over at BP today.”

Something tells me that this quiet may not last for long.