A Rare Win for The Environment

It isn’t often that big oil is on the losing side of a case, but the week of May 26 could have been the beginning of a shift in this pattern. Such a change is long overdue, as experts say we are already seeing the drastic effects of climate change brought on by big oil. May 26, now being dubbed a “Black Wednesday” for big oil, brought further environmental restrictions for three notable oil companies, Chevron, ExxonMobil, and Shell.

In the Netherlands, a Hague district court found Shell’s sustainability policy to be “insufficiently concrete” and they were ordered to cut emissions 45% by 2030. According to Roger Cox, a lawyer for the prosecution, this is the first time a judge has ordered a high-polluting big oil company to follow the rules of the Paris Climate Agreement. Shell says they plan to appeal this ruling, but it is unlikely to change as they were found to be breaking both Dutch civil code and two articles of the European convention on human rights. Not only is this a success for activists in The Netherlands, it could make courts more likely to side with activists worldwide by setting an example of positive environmental change.

How the courts rule on certain issues can either reflect or presage movements in how the public feels about those issues. In the same way the American ruling in Board v. Brown came long before social unrest regarding segregation, we may be seeing the Dutch ruling as the first steps in a larger march. For instance, investors at Chevron, another one of the world’s largest oil companies, have been pushing for increased emissions cuts. On the same day as the Shell case, shareholders voted in favor of a new proposal to reduce the company’s carbon footprint. Investors have long been advocating for Chevron to make this move, and it is finally being done through their plan to cut “scope 3” emissions, which generally come from consumer use. No specific numbers are outlined as to how much they need to cut, but it seems more and more people at the company are in favor of this plan. The proposal passed with a vote of 61%. Although this isn’t going to make all the necessary changes, it is a good sign that oil companies are starting to recognize the detrimental impacts their actions have.

Last, but certainly not least, on the list of successes for activists that same week came at ExxonMobil. Investors at the company won their fight against the big oil company on May 26. These investors are people with a certain stake in the company who aim to make change within by contributing money. Though they are individuals like you and I, their collective action can contribute to larger decisions at the company. Engine No. 1, an activist hedge fund of investors, has been pushing to have more people on the company’s board of directors that support cutting carbon emissions. That week, they were able to get two new candidates placed on the board, which is a huge step in the right direction. These new candidates want to focus on a “greener strategy” for the company. Last week, Engine No. 1 was able to further this progress by getting a third member appointed to the board. This five-month battle led to a rare success for the small hedge fund, and, like the cases at Shell and Chevron, may lead to future successes as well.

These specific cases at Shell, Chevron and ExxonMobil may seem somewhat insignificant on their own, but if investors continue to push for such changes at big oil companies, we could see a great deal of positive change for our environment. Although everyone can take steps to reduce climate change, a major shift will require looking at the big picture. Over 20 percent of emissions come from oil, gas and coal drilling on public lands. If big oil companies aren’t required to slow these emissions in the coming years, the effects could be catastrophic. However, this is a sign that positive changes can be made through environmental activism, and though it does not have a direct effect on the U.S. now, it will set an example for activists and environmentalist investors around the world and hopefully inspire them to work even harder. Whether it is abroad or here in the U.S., change has to start somewhere, and this was only the beginning.