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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Boardroom Blitz Isn’t A Crushing Blow For Big Oil

Exxon HQ

Whether Big Oil was just dealt a crushing blow by climate activists or whether this is simply a new leaf in a book that we’ve already opened depends largely on which headlines you read and on which side of the politico-energy divide you fall.  

If you strip away the headlines and empty your head of the narrowly polarizing aspects that have hijacked our global energy transition, it’s possible to examine what just happened on the Big Oil emissions scene with some useful sobriety. 

Climate activists have every reason to be celebrating their boardroom--and in one case, courtroom--victories over Big Oil this month. But those victories, while long fought battles, do not imply the end to a mass casualty war. This was never meant to be a war. It is a “transition”, and what just happened in the boardrooms of the world’s biggest oil companies was a natural part of that. 

It’s not an end to Big Oil, and it’s not as crushing a blow as has been suggested. 

Shell, BP, Exxon and Chevron have just emerged from some turbulent shareholder votes and, in the case of Shell, a court case. 

The cause of the turbulence was climate change and these companies’ efforts in helping mitigate it. The result of the turbulence is open to interpretation but many have seen it as a win for climate activists.

BP was first. Earlier this month, nearly 21% of its shareholders voted for a resolution filed by Dutch activist investor group “Follow This”, which had demanded the supermajor increase its emissions-cutting commitments. “Follow This” necessarily interpreted this as a major victory since a previous resolution of a similar nature had garnered only 8% of the votes.

Indeed, from this perspective, the vote is a definite improvement for the climate change lobby. 

From the perspective of absolute numbers, the overwhelming majority of BP’s shareholders are fine with what the company is doing in terms of climate commitments right now. Yet, the increase in vote numbers for the climate resolution suggests things are changing, but it certainly won’t be overnight.

The shareholder vote at Exxon this week supports this suggestion. The supermajor reported that eight of its own nominees to the board of directors were voted in as well as two nominees of Engine No. 1, a hedge fund acting as activist investor with big ambitions to change Exxon’s ways.

So, yes, eight is more than two, but this is about much more than mathematical absolutes. The fact that even these two nominees won board seats is indeed a historic victory for activist shareholders, not least because Exxon’s chief executive himself campaigned against the Engine No.1 nominees, as the Wall Street Journal pointed out.

“We welcome all of our new directors and look forward to working with them constructively and collectively on behalf of all shareholders,” Darren Woods said after the vote. Related: Russia: Current Oil Market Deficit Is 1 Million Bpd

“We’ve been actively engaging with shareholders and received positive feedback and support, particularly for our announcements relating to low-carbon solutions and progress in efforts to reduce costs and improve earnings. We heard from shareholders today about their desire to further these efforts, and we are well positioned to respond,” Woods added.

One could call this pretending to not have your arm twisted, but there are few options when you’ve been beaten in your own boardroom. Once again, most of the board members voted in by shareholders were Exxon nominees but a wind of change is certainly blowing in Big Oil Land.

That same wind blew right in the face of Chevron. 

The company’s shareholders last week voted for a proposal that sought to reduce emissions generated by the people who use Chevron’s products. With a majority of 61%, shareholders remained deaf to the supermajor’s management’s efforts to kill the proposal, forcing it instead to commit to an ambitious emission-reduction plan.

Then there was one: Shell. Shell didn’t lose to shareholders. Shell lost to a Dutch court, which ordered the supermajor last week to slash its carbon emissions by 45% by 2030 in a landmark ruling in a climate case brought by environmentalists that could set significant precedents for other oil companies.


Shell already had big emissions-reduction plans; however, as a baseline, it used its emission levels from 2016. The court ruled it should reduce emissions from 2019 levels, including those of its suppliers and of its buyers.

Unsurprisingly, the plaintiffs in the case, “Friends of the Earth”, cheered the court’s decision, calling it “a monumental victory for our planet, for our children and is a step towards a liveable future for everyone”.

Big Oil majors, especially those in Europe, have gone to great pains to show they are serious about reducing their carbon footprint. Many on the activist camp have remained unconvinced. Now, it seems, they are beginning to gain influence among shareholders—and courts—and this may be just the beginning of a transformational change for the industry.

By Irina Slav for Oilprice.com

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  • Mamdouh Salameh on May 28 2021 said:
    It isn’t even a whimper. Big Oil will neither be swayed by such theatrics nor will it change its direction as long as there is global demand for oil.

    Neither the Dutch court ruling nor the ExxonMobil Boardroom vote and the call by the
    International Energy Agency (IEA) for an immediate halt to oil exploration and financing of new oil and gas projects will force Big Oil to divest of its core business and become overwhelmingly a green energy business. This isn’t going to happen as long as the global economy continues to run on oil and gas.

    The issues of zero emissions, climate change and global energy transition and interlinked. The way to combat climate change is to reduce carbon emissions from fossil fuels and not the actual use of fossil fuels.

    Environmental activists and divestment campaigners probably have their own political agenda. That is why any discussion about climate change and energy transition usually pits fossil fuels (oil, natural gas & coal) against renewables and quickly degenerates into another predictable polarization slang.

    In order to have a nuanced discussion of climate, we should objectively discuss claims about excessive weather conditions caused by climate change, drop unsubstantiated claims based on dogma by environmental activists and divestment campaigners and accept facts as basis of the discussions.

    There's little doubt that large-scale use of fossil fuels contributes significantly to climate change. If this is the case, then why is it proving so hard to replace them?

    The answer is that on their own, renewables aren’t capable of satisfying global energy demand because of their intermittent nature. Moreover, global energy transition won’t succeed without major contributions from both natural gas and nuclear energy. Furthermore, the global economy will come to an immediate standstill without oil.

    If we go back in history to when records started we could easily find that the very same rising sea levels, wild-fires, heat waves, and extreme weather conditions which are already wreaking havoc everywhere had also happened years before. Environmental science has yet to establish unequivocally whether these were caused by human beings using fossil fuels or as a result of natural developments or both.

    However, some distinguished scientists don’t believe that man’s actions including the use of fossil fuels are solely behind climate change and global warming. For instance, Robert B. Laughlin, co-winner of the 1998 Nobel Prize in Physics says in an essay titled: ”What the Earth Knows” that “what it knows is this: What humans do to, and ostensibly for, the earth does not matter in the long run, and the long run is what matters to the earth. We must think about the earth's past in terms of geologic time.”

    Damaging this old earth is, Laughlin says, "easier to imagine than it is to accomplish." There have been mass volcanic explosions, meteor impacts, "and all manners of other abuses greater than anything people could inflict, and it's still here. It's a survivor."

    People can cause climate change, but major glacial episodes have occurred "at regular intervals of 100,000 years," always "a slow, steady cooling followed by abrupt warming back to conditions similar to today."

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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