Black Wednesday for three oil companies





It was a bad week for three big oil companies which culminated with news on Wednesday. In an article in The Guardian called
“‘Black Wednesday’ for big oil as courtrooms and boardrooms turn on industry” by Jillian Ambrose, ExxonMobil, Shell, and Chevron all received a message they need to do better in complying with actions to combat climate change.

A link to the article is below. Here are a few select paragraphs that give you the gist.

“The world’s patience with the fossil fuel industry is wearing thin. This was the stark message delivered to major international oil companies this week in an unprecedented day of reckoning for their role in the climate crisis.

In a stunning series of defeats for the oil industry, over the course of less than 24 hours, courtrooms and boardrooms turned on the executives at Shell, ExxonMobil and Chevron. Shell was ordered by a court in The Hague to go far further to reduce its climate emissions, while shareholder rebellions in the US imposed emissions targets at Chevron and a boardroom overhaul at Exxon.

‘There is no doubt that this week’s news has been not so much a shot across the bows as a direct hit to the hull of Big Oil,’ says Mark Lewis, the chief sustainability strategist at BNP Paribas Asset Management. ‘They will have to recognise now that no amount of patching up the hole will do; shareholders and society want the vessel completely overhauled.’

‘It was honestly a really emotional moment,’ says Jasper Teulings, the former general counsel for Greenpeace International. The ruling by the Dutch court ordering Shell to cut its emissions by 45% within the next 10 years ‘shifts the debate’ and could influence courtrooms across the globe, he told the Guardian.

‘It makes clear that the onus is on the industry to act, and that it can be held accountable to take very specific steps. It’s very relevant in legal terms because the ruling was very pure in its demand: it’s not about money, it’s about conduct. It was astutely reasonable,’ he says.”

This is a major step forward for those fighting to corral and reverse climate change. The shareholder actions are indicative of a movement that started making strides in 2017 requiring three energy companies to inform shareholders of their progress in addressing climate change.

Let’s hope management is listening. With the removal of a couple of board members, that is a clear sign they better.

https://www.theguardian.com/environment/2021/may/29/black-wednesday-for-big-oil-as-courtrooms-and-boardrooms-turn-on-industry

Citing climate differences, Shell walks away from U.S. refining lobby

Last month. Reuters wrote an article entitled “Citing climate differences, Shell walks away from US refining lobby.” Here are the lead paragraphs.

“Royal Dutch Shell Plc on Tuesday became the first major oil and gas company to announce plans to leave a leading U.S. refining lobby due to disagreement on climate policies.

The review is part of Shell’s drive to increase transparency and show investors it is in line with the 2015 Paris climate agreement’s goals to limit global warming by reducing carbon emissions to a net zero by the end of the century.

It is also the latest sign of how investor pressure on oil companies, particularly in Europe, is leading to changes in their behavior around climate. Last year, Shell caved in to investor pressure over climate change, setting out plans to introduce industry-leading carbon emissions targets linked to executive pay.”

Shell is not the first oil company to cave to investor pressure. Exxon Mobil and Occidental Petroleum (along with utility PP&L) have to inform shareholders of their progress to addressing climate change after shareholder votes required them to do so. Exxon also has two lawsuits it is dealing with accusing them of misleading investors on the financial impact of climate change.

Climate change is real and is impacting us now. The greater number of sunny days coastal flooding, increased number of droughts, increased and more severe forest fires and the added flooding due to slow moving storns are traceable to the impact of climate change, so says climate scientists. I encourage you to ask politicians what they propose to do about this existential threat to our future. If they do not respond or fail to offer any tangible ideas, do not vote for them. We must move forward as we have squandered much of our window to act.

 

Walmart and Mars

What does this title mean, you ask? Walmart and Mars are two global companies moving the ball forward to combat climate change. Mind you, it is not just altruism driving these efforts, it is creating a sustainable, more predictable and better cost model. And, companies care about cost.

On PBS Newshour yesterday, an update on an earlier story was provided.  Walmart has a goal of being 100% renewable energy powered which they established a decade ago under CEO Scott Lee. They started simply, retraining their truck drivers on better ways to shift gears and drive to save fuel costs and actually measure fuel efficiency in truck driver performance.

Walmart also is converting their 12,000 stores to renewable energy. The PBS Newhour update noted that almost 500 stores in the US have been converted to solar power. Now, 28% of their US energy needs comes from solar energy. Retail stores have a lot of roof space, so companies like Walmart and IKEA have growing numbers of solar powered stores. They are also asking their suppliers to be better environmental stewards.

Mars is known for its candy, the biggest seller being M&Ms. Their goal is to make decisions that are “good for the environment and good for Mars,” They are using combinations of solar and wind energy to power their manufacturing plants. They just rolled out a new wind farm in Texas, a state that produces more wind energy than any other. Mars has noted their costs are lower with the renewable energy.

Fortunately, Walmart and Mars are not alone. Google, Facebook and Amazon are driving forces behind renewable energy given their significant data and distribution center power needs. Their centers in North Carolina are a reason NC ranks so highly on solar energy lists.

Yet, we should not lose sight that the cost of renewable energy has decreased so greatly, the decision is not just environmental, it is economic. Paula Diparno of CDP said on PBS Newshour that addressing climate change is “no longer a punishment, it is an opportunity.”

That is a huge shift in mindset. She added that there are three stakeholders for companies – customers, shareholders and management. Customers are noticing, shareholders are becoming more insistent and management better be paying attention. To this end, Blackrock, a major institutional investor, is requiring its companies to define what they are doing about renewable energy and climate change.

To this end, because of Blackrock’s efforts, Exxon Mobil’s shareholders voted last year to require management to do more and report back on addressing climate change. Ironically, this vote was the day before the current US President announced that he was withdrawing from the Paris Climate Change Accord. That contrast speaks volumes.