Was Wednesday a historic day for the movement towards clean energy?
- Dutch court orders Shell to cut carbon emissions by 45% by 2030.
- Exxon loses at least two board seats to activist hedge fund Engine No. 1.
- Chevron shareholders endorse a proposal to further cut emissions.
Exxon Mobil Corp (NYSE: XOM), Chevron Corp (NYSE: CVX), and Royal Dutch Shell (AMS: RDSA) made headlines on Wednesday as shareholders and the Dutch court (in the case of Shell) rebuked three of the world’s largest oil companies for insufficient efforts for a move towards clean energy.
Dutch court orders Shell to cut carbon emissions by 45%
In its ruling on Wednesday, a Dutch court made Shell liable for a 45% reduction in its carbon emissions by 2030, compared to 2019 levels. Originally, the oil giant had a target of slashing its carbon emissions by only 20% by the end of the decade.
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According to Shell’s current climate strategy, the Hague-headquartered company wants to turn carbon neutral by 2050. Before Wednesday’s ruling, it had a target of a 45% reduction in emissions by 2035 instead.
Shell slipped just under 1% in premarket trading on Thursday and lost another 0.5% on market open.
Exxon loses two board seats to activist hedge fund
In related news, Engine No. 1 made Exxon Mobil Corp give up at least two of its board seats to the activist hedge fund – a move that is aimed at pushing the U.S. oil giant to ramp up its efforts to shift away from fossil fuels.
Engine No. 1 nominated four members in total to the board. Counting is currently ongoing, and the prospect of another one of its nominees securing a seat on Exxon’s board remains on the table. Exxon shares were down about 0.5% in premarket trading on Thursday.
Chevron shareholders endorse a proposal to further cut emissions
Shareholders of the rival Chevron Corp on Wednesday also endorsed a proposal to slash emissions further. The proposal, however, does not specify the target that the oil company has to hit in terms of cutting emissions.
Chevron is lagging behind its competitors in announcing a long-term strategy to turn carbon neutral. Shares of the company slid roughly 0.5% in premarket trading.
Leslie Picker’s comments on CNBC’s “The News with Shepard Smith”
On “The News with Shepard Smith”, CNBC’s Leslie Picker said on Thursday:
“It’s remarkable – really, a turning point for big oil, one that bolsters the case for pro-climate activists. For years they were shunned from the boardrooms with environmental concerns being brushed off as political statements, but if today signals anything, it’s that those who hold the purse strings of big oil, namely shareholders as well as courts, see climate change as far more than that.”
The news comes after Shell, Exxon, and Chevron reported record losses last year as the Coronavirus pandemic weighed on oil prices, turning them negative for the first time in history.