British energy giant Shell has been hit with a new lawsuit over climate change. Activist investors are accusing the company’s leadership of mismanaging risks. Corporations have faced a growing number of climate-related lawsuits in recent years as they come under pressure to step up efforts to curb global warming.
for failing to manage the material and foreseeable risks posed to the company by climate change.
Breach of legal duties
Client Earth said in a statement that the group’s current plan:
will tie the company to projects and investments that are likely to become unprofitable as the world cleans up its energy systems.
That puts the company’s long-term commercial viability at risk, and also threatens efforts to protect the planet, further increasing the risk to the company.
ClientEarth alleges the Shell board “breached legal duties” by “failing to adopt and implement an energy transition strategy that aligns with the Paris Agreement”. Under the landmark 2015 Paris deal, nations pledged to reach net-zero carbon emissions by the middle of the century. This is an attempt to limit the average temperature increase to 1.5C.
ClientEarth said its legal action had the support of institutional investors holding more than 12 million shares. Meanwhile, Shell stressed such investors were not claimants but had instead sent ClientEarth letters of support.
Greenwashing
Shell is facing criticism over its net-zero plans from the wider environmental lobby. They accuse it of “greenwashing“, or marketing a company as overly climate-friendly. Earlier this month, according to non-profit Global Witness, Shell had “misleadingly” exaggerated its spending on renewable energy:
The US Securities and Exchange Commission (SEC) has been urged to act over Shell’s most recent annual report in which it stated 12% of its capital expenditure was funneled into a division called Renewables and Energy Solutions in 2021.
Global Witness allege that:
just 1.5% of Shell’s capital expenditure has been used to develop genuine renewables, such as wind and solar, with much of the rest of the division’s resources devoted to gas, which is a fossil fuel.
Increasingly, massive profits from energy companies are being met with ire on social media. Greenpeace UK didn’t have much patience for Shell’s massive profits:
SHOCKING FACT: If you earned £40,000 a day from when Jesus was born to the present day, you would still not make as much as Shell did in profits last year
— Greenpeace UK (@GreenpeaceUK) February 8, 2023
Wildlife presenter and conservationist Chris Packham was horrified at how climate inaction would be remembered:
We are being cooked , choked and taken to the cleaners . . . if we ever become anyone’s ancestors they will ask ‘what the hell were those mugs doing ? They stood by and let them burn the world’ . . . Shell reports highest profits in 115 years https://t.co/lPtOatd875
— Chris Packham (@ChrisGPackham) February 2, 2023
Activist Howard Beckett expressed disgust at Shell’s profits:
Shell has just reported its highest profits in its 115 year history.
They made £32.2 billion in profit in 2022.
Your gas bill has doubled in a year. Shell’s wholesale costs are lower today than this time last year.
A rip off.
— Howard Beckett (@BeckettUnite) February 2, 2023
Anti-privatisation campaign group We Own It compared Britain’s failings to France, where energy prices are capped:
Outraged that Shell and BP are taking us for fools and raking in profits of £32.2bn?
When in France, public ownership of EDF means their bills are capped.
Join our call to nationalise energy: https://t.co/WvfGzQiLej pic.twitter.com/gywJIuw6q6
— We Own It (@We_OwnIt) February 2, 2023
Likewise, MP Zarah Sultana rightly pointed out how manufactured the cost of living crisis is:
Shell's obscene £32,200,000,000 profits reminds us it's not a cost-of-living crisis because there's not enough wealth.
It's a cost-of-living crisis because the super-rich have hoarded all the wealth.
— Zarah Sultana MP (@zarahsultana) February 2, 2023
Manufactured crises
The energy sector as a whole has faced growing calls to step up efforts to transition away from fossil fuels. Furthermore, the wider world is scrambling to acheive a net-zero emissions economy by 2050. In spite of that, British oil giant BP on Tuesday 7 February reduced its target for cutting carbon emissions after reporting that its underlying profit had more than doubled last year to $27.7bn.
As larger and larger profits roll in for energy companies, it’s becoming even more clear that the government doesn’t care about people struggling to heat their homes. Instead, it wants big business to flourish, so the rich get richer, and the poor stay poor. There’s more than enough wealth to go around, but the grim logic of capitalism means that ‘crises’ are actually just the system working as it’s supposed to.
Featured image by Unsplash/Justus Menke
Additional reporting by Agence France-Presse
This post was originally published on Canary.