Shell to Speed Up Transition After Court Ruling

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Royal Dutch Shell will speed up its plans to cut greenhouse gas emissions, even as it appeals a Dutch court ruling that it must make a greater effort to limit the negative impacts of climate change. "For Shell, this ruling does not mean a change, but rather an acceleration of our strategy," CEO Ben van Beurden said in a lengthy LinkedIn post. "That is likely to mean taking some bold but measured steps over the coming years," he said. But Van Beurden also emphasized the need to remain "profitable" in order to make the new investments required to shift the company toward new and cleaner business lines. The court's decision ordered Shell to cut its absolute emissions 45% by 2030, a ruling that the judge argued was needed to minimize the negative impacts of climate change (IOD May26'21). That will require a significantly greater effort than Shell's previously adopted target of a 20% cut in its carbon intensity -- emissions per unit of energy produced and sold -- by 2030 on the way to attaining net-zero emissions by 2050. Shell has said it plans to appeal the ruling. Demand Must Be Addressed Too Van Beurden also pushed back against the idea that climate lawsuits against individual companies will help to decarbonize the world. "Imagine Shell decided to stop selling petrol and diesel today," he wrote. "This would certainly cut Shell's carbon emissions. But it would not help the world one bit. Demand for fuel would not change." Van Beurden is not alone in questioning the real impact of the growing pressure that is being put on public companies to shift from fossil fuels to low- and zero-carbon energy. At a recent conference, Larry Fink, CEO of investment giant BlackRock, called the trend "greenwashing." He argued that measures which fail to address demand for fossil fuels simply shift responsibility for the climate change challenge from governments to corporations. And he specifically criticized the Shell judgment. Nevertheless, pressure from litigation is expected to increase and spread beyond Shell. Environmental activists have already promised to use similar arguments in a suit against TotalEnergies to accelerate that company's own already ambitious goals. "The events also raise the specter that oil and gas companies could possibly be held legally responsible for their role in climate change while executives who choose to ignore climate change or don't act quick enough could stand to lose their positions," said analysts at ratings agency S&P Global. Noah Brenner, London

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