A good day for life on Earth

Lots of publications said yesterday was “A bad day for Big Oil.” It was! But there's a bigger takeaway.

May 27, 2021

If you regularly read The Washington Post, Bill McKibben’s wonderful climate newsletter at The New Yorker, or the top-notch politics newsletter Popular Information, you probably saw the news: yesterday was “A bad day for Big Oil.”

Not to knock on my friends—they’re absolutely right—but I think there’s a bigger takeaway. It wasn’t just a bad day for Big Oil. It was a great day for life on Earth.

We haven’t had many good days on that front lately. The American West, the Amazon rainforest, and Brazil’s Pantanal wetlands are all bracing for catastrophic wildfire seasons. Another above-average hurricane season is brewing in the Atlantic. And last week, the world’s top energy body (the International Energy Agency) released a report with a sobering message: that to truly keep the climate crisis under control, investors have to stop funding new fossil fuel development by next year.

Spoiler alert: the world’s biggest fossil fuel investors are not planning on doing that.

At least, not yet. And that’s why yesterday was such good news. It offered proof that fossil fuel CEOs aren’t the sole deciders of who gets to live and thrive on future planet Earth. They don’t have to want to change. Through various means, we can force them to.

In case you missed what actually happened yesterday

The biggest news came from Exxon, the fourth most-polluting fossil fuel company in the world. At its annual shareholder meaning, a tiny hedge fund with a less than .02% stake in the company won at least two seats on the board of directors.

This was “a stunning loss” for Exxon’s leadership, who have mostly refused to diversify away from fossil fuels, the New York Times reported, and ““one of the most significant victories for shareholders who have been pushing for drastic action on climate change,” reported Yahoo News. That victory, added the Times, “could force the energy industry to confront climate change and embolden Wall Street investment firms that are prioritizing the issue.”

It wasn’t even the only such victory of the day. At Chevron—the second-most polluting fossil fuel company in the world— shareholders rebelled against the board of director’s wishes, and “voted 61% in favor of a proposal to lower Scope 3 emissions from the company's customers.” This follows similar news from earlier this month, when ConocoPhillips shareholders did pretty much the exact same thing. ConocoPhillips is the 13th biggest climate-polluting fossil fuel companies in the world.

The shareholder actions could have gone further. At Chevron, shareholders narrowly rejected a proposal that would have required the oil giant to prepare a report on how its core business would be affected if the U.S. truly went to net zero emissions by 2050, as President Joe Biden has pledged. Another proposal requiring Chevron to disclose more information about its political lobbying also narrowly failed. (Both received 48 percent of votes).

But these were still big steps forward for the planet—as was the news yesterday from the Netherlands, where a court ruled that Royal Dutch Shell, the seventh-largest climate-polluting fossil fuel company in the world, must dramatically reduce its carbon emissions. Business Insider called that ruling “a landmark climate decision that could have far reaching consequences for oil companies.”

More importantly, though, it could have far-reaching consequences for us.

Particularly in the United States, we have a tendency to frame climate news around economics. We think first about the economic sector affected by a court ruling or an investor action, and the human, animal or plant life affected second, if at all. I have been guilty of this countless times; last week, for example, I framed a Supreme Court ruling as “a win for Big Oil” rather than “a loss for human life.”

But today, as we head into the weekend, I am going to revel less in this week’s news being a middle finger to one of the most moneyed and powerful industries in the world, and more in it being a group hug to everyone around me. Ok, maybe a little bit of a middle finger too. For funsies.

Bonus thought: does this mean investing has more impact than divesting?

I saw some folks talking on Twitter yesterday about the Exxon and Chevron investor victories, and whether it means staying invested in fossil fuel companies is perhaps a better idea than divesting from them. So I put out a call to see if anyone with expertise had thoughts.

Emily Atkin @emorwee

Interested to hear what more people think about this in light of the Exxon shareholder vote. If this is your area of expertise, and you have thoughts, DM me!

Andrew Leach @andrew_leach

@emorwee Turns out that investing can have more impact than divesting. ;)

I received a message from Brady Quirk-Garvan, co-owner of impact investing firm Natural Investments, that I thought summed things up nicely:

Seems like an over simplification. The massive and initially radical push for divestment is what put companies like Exxon on notice and drew a hard line in the sand.
I think it's safe to say the thousands of investors who have divested lead the way for todays vote. If people had just bought Exxon and tried to change it internally I am sure Blackrock and others would have found a way to squash the climate change push.
Companies change because of external and internal pressure. Today was a huge win for the internal push but in the end it doesn't change the fact that Exxon is a fossil fuel company that wouldn't be taking this step without divestment.

Thoughts? Please discuss in the comments!

Catch of the Day:

Just like today’s newsletter is sorta like yesterday’s newsletter but different, so too is this picture of Fish sort of like yesterday’s picture, but different.

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