It wasn’t a good day for Big Oil.
Shareholders on Wednesday reprimanded the two largest US oil companies for campaigning against climate change, while a Dutch court ruled that Royal Dutch Shell must accelerate greenhouse gas emissions reductions.
On Thursday, an Australian court ruled that the country’s environment minister has an obligation to children to consider the damage caused by climate change as part of her decision to approve the expansion of a new coal mine.
“Today was a strong warning for Big Oil,” said Bess Joffe of the Church Commissioners for England, who manage the Church of England’s mutual fund, on Wednesday. Executives are being “held accountable by investors and lawmakers,” she added.
Exxon Mobil lost at least two directorships to an activist hedge fund, and Chevron shareholders backed a call to further reduce its emissions.
Investor support for climate change could force oil and gas companies to rethink how quickly they turn to other forms of energy. BP Plc, which recently committed to consulting shareholders on its climate targets, could see the next test of the fundamental wave.
The Dutch court ordered Shell to reduce its carbon emissions by 2030.
Shell said it would appeal and analysts did not have the final say on the decision.
“This decision has a negligible chance of surviving vocations,” said Per Magnus Nysveen of energy consultancy Rystad Energy.
In a jaw-dropping blow to Exxon’s top management, shareholders elected two candidate amendments to their board of directors and approved actions that require annual reports on climate and grassroots lobbying. Activists could still win a third seat with some votes still to be counted and full board not yet known.
After the meeting, CEO Darren Woods said Exxon had heard shareholder requests to press ahead with efforts to cut carbon emissions and cut costs.
“We are well positioned to respond,” he said.
Chevron shareholders backed the company’s call to reduce emissions from the end-use of its fuels, with 61 percent backing the petition. Another resolution calling for a report on the business impact of achieving net zero emissions by 2050 was supported by 48 percent of the votes cast.
“The question for oil companies is when and how much” they cut oil and gas production in response to investor and social concerns, said Charles Elson, professor of corporate governance at the University of Delaware.
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Investors have registered protests against the slow pace of change, but corporate executives need to evaluate how to implement non-binding resolutions, he said.
The votes signal a new sense of urgency, said Mark Van Baal, who heads a climate advocacy group that passed resolutions calling for emissions reductions at Chevron, ConocoPhillips and Phillips 66. All received at least 58% support.
Investors say, “We want you to cut emissions now, not the distant future,” he said.
Separately, the ruling by the Federal Court of Justice of Australia that the government must consider the effects of climate change when deciding whether to authorize the expansion of a new coal mine was also of major importance.
The verdict came in response to a class action lawsuit filed by eight teenagers arguing that the expansion of Whitehaven Coal Ltd’s Vickery project in New South Wales would contribute to climate change and put their futures at risk.
In its ruling, Justice Mordecai Bydgoszcz said the Australian Environment Minister could foresee the possibility of future harm to the children in this case from the increase in carbon dioxide emissions from Whitehaven’s expansion and therefore must recognize a so-called due diligence or moral obligation to the children in approval.
However, the court did not issue an injunction to prevent the minister from approving the enlargement.