Is this fossil fuel’s Big Tobacco moment?

The mounting pressure on oil companies to meaningfully address climate change has been ratcheted up several notches in one day thanks to decisions by a Dutch court and US investors. 

What happened 

• A court in The Hague ruled that Royal Dutch Shell needs to lower its emissions by 45% from 2019 levels by 2030 – far faster than the 20% the company had planned. 
• A US activist hedge fund, backed by investment company BlackRock, won two seats on the board of ExxonMobil, arguing against the energy giant’s continued focus on oil and gas.
• Chevron shareholders called on the company to set tough targets on the emissions from the products it sells for the first time.

What it means

Climate litigation and shareholder activism are putting the activities of energy companies under the spotlight and highlighting the need to change behaviour as sustainability issues become mainstream. Communications with the public will need to be transparent to avoid accusations of greenwashing. 

Key quote

“This [Shell ruling] will be seen in retrospect as the day when everything changed for Big Oil. How the industry chooses to respond to this clear signal will determine which companies thrive through the coming transition and which wither” – Andrew Logan, head of oil and gas at Ceres.

Sourced from NPR, Financial Times