Chevron – Global Energy Leaders Under Increased Pressure To Reduce Emissions – Energy and Natural Resources
Global Energy Leaders Under Increased Pressure To Reduce Emissions
To print this article, all you need is to be registered or login on Mondaq.com.
In a ruling from the Hague District Court on May 26,
2021, the Court has ordered Royal Dutch Shell
(“Shell”) to reduce its CO2 emissions by 45%
of its 2019 levels by 2030.
Milieudefensie voor Veranderaars (the “Claimants”)
claimed that Shell has an obligation to contribute to the
prevention of climate change through its corporate policy, stemming
from an unwritten standard of care in the Dutch Civil Code. The
standard of care comes from Shell’s endorsement of human rights
and of soft law such as the UN Global Compact and the OECD
Guidelines for Multinational Enterprises. Uniquely, the Claimants
did not seek any compensation, only for Shell to reduce its
This ruling comes after Shell announced plans earlier in 2021 to
reduce carbon intensity by 20% by 2030 and 100% by 2050 relative to
its 2016 levels – a plan widely considered to be one of the
sector’s most ambitious. The Court did not find this policy to
be concrete or certain enough to satisfy Shell’s
Although some are touting the Court’s decision as a landmark
decision with global impacts, the ruling is only binding in the
Netherlands. Further, Shell will almost certainly appeal, leaving
this decision vulnerable to being overturned.
Exxon Mobil Corp (“Exxon”) and Chevron Corp.
(“Chevron”) also faced pressure from investors at their
annual general meetings on May 27, 2021.
Two Exxon directors were ousted by shareholder Engine No. 1, a
hedge fund that has been critical of Exxon’s uptake of climate
Chevron saw two thirds of its investors supporting a resolution
to set targets to further reduce its greenhouse gas emissions.
Although these events indicate that the oil and gas industry is
under increased pressure from stakeholders to move toward a more
climate-conscious corporate strategy, the success rate of these
initiatives is far from 100%.
Exxon shareholders rejected all of the investor-led
environmental resolutions at its annual general meeting, and
Chevron shareholders rejected two climate-related resolutions.
Nonetheless, stakeholders are putting the oil and gas industry
on notice and some players in the sector, such as Suncor Energy
Inc. (“Suncor”), are heeding that warning. Suncor has
pledged to cut its greenhouse gas emissions by one third by 2030
and to be net zero on carbon emissions by 2050.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
POPULAR ARTICLES ON: Energy and Natural Resources from Canada