A “tipping point” is the moment when slow progress, bubbling beneath the surface, turns into radical change. made famous by Malcolm Gladwell and recently by climate scientist Worldwide, tipping points can be dire, such as the sudden, rapid melting of the Greenland ice sheet; Or they could be dire, such as the rise of solar farms around the world due to declining renewable prices.
Big Oil may have reached its climax this week when three major oil companies – ExxonMobil, Royal Dutch Shell and Chevron – were reprimanded by shareholders and the courts for not aligning their strategies with the threat of climate change.
“The fact that it [Exxon] The vote took place on the same day as the news about Shell and the strong vote for Chevron – it adds to this sea change,” said Andrew Logan, head of oil and gas at nonprofit investor network Ceres. “A time when investors are doing the right thing. To the board and management were willing to trust, that has passed.”
ExxonMobil, which has long planned to double oil and gas production despite a rise in the planet’s temperature, faced its annual revolt. shareholder meeting, when a small hedge fund called “engine number 1managed to elect two candidates to the company’s board. (The winner of the third seat on the board is too close to call.) The new board members, energy industry veterans, want the company ready for a world With more renewable energy, more electric vehicles, and less appetite for oil and gas.
Meanwhile, at Chevron’s annual meeting, a preliminary vote showed that 61 percent The company’s shareholders supported the proposal for continuing emissions reductions when consumers buy and burn oil and gas (“scope 3” carbon emissions), despite opposition from the company’s board of directors. In the Netherlands, a court Royal Dutch Shell ordered To reduce its carbon emissions by 45 percent over the next nine years, setting a precedent that could force other companies to curb their carbon pollution in future lawsuits.
But as the events unfolded, they have been working for many years. First campaign for fossil fuel endowment begins on US university campuses in 2011; since then, almost $14 trillion Investments have come from coal, oil and gas around the world. Over the past decade, economists have also “became concerned about the possibility” ofcarbon bubble“: The plethora of investments in coal mines, oil production, and gas-powered cars, which could be stuck if the world begins a rapid transition to a renewable energy and low-carbon economy.
Although many investors don’t want to sell their oil stocks and bonds — they also don’t want to hold onto dangerous assets when the carbon bubble bursts. This prompted several large asset management firms to try to turn oil companies inside out.
Logan says that once major investors start worrying about the future of oil and gas, anger can spread quickly. “There is a herd mentality in the investment sector,” he said. “These large investors often move as a group.” This is part of what happened with ExxonMobil earlier this week, when investment giant BlackRock — which has a 6.7 percent stake in the company – announced that it would support three of the four rebel candidates on the board. Researchers have predicted the same: early last year, a group of scientists produced a set of six”social tipping points“Which could help the planet shift suddenly away from fossil fuels. One came from the financial system: If investors start hesitating about fossil fuels, the authors wrote, it could lead to an “avalanche effect” where More and more investors either pull their money out of oil, gas and coal or stop their investments and demand a change in the companies’ business models.
At the moment, it is difficult to say how much of the recent turmoil will have a direct impact on the oil giant. Shell is likely to appeal the decision in a Dutch court, and despite some headlines to the contrary, Exxon’s new board members are absolutely not “climate activist“: is the former CEO of an oil refiner. He seems to be more concerned with the company’s bottom line than with the warming planet. But the most lasting legacy may be the one that signals to the rest of the market, other big investors, and the companies themselves: Oil and gas is no longer a safe bet.
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