Court Orders Shell To Set Stricter Climate Targets — Other Companies Should Follow

Targets Must Include Scope 3 Emissions

On May 26, 2021, the Dutch District Court in The Hague (Rechtbank Den Haag) issued a landmark ruling in support of fighting the climate crisis. Upon review, the Court deemed Royal Dutch Shell’s current targets inadequate. They stipulated that the global fossil fuel giant’s greenhouse gas emissions must be reduced at much larger scale — including scope 3 — use of product emissions (cf. definition in 2.5.4 of the ruling).

This is huge. And it feels like the importance of this detail is still underreported.

According to the latest science, we are on the terrifying trajectory of the UN IPCC’s worst-case scenario RCP8.5, with levels of warming, sea level rise and destruction that are hard to impossible to process.

Screenshot of a Tweet by Dr. Ronge mapping RCP8.5 with data from actual observed patterns, showing that we are headed in the direction of the worst-case scenario.

Dr. Thomas Ronge illustrated this recently in a graph widely shared on Twitter, incl. data sources from 2019 and 2020, that maps projected sea level rise with actual observed patterns.

In July 2021 alone, we witnessed so many extreme weather events across continents, incl. floods, heatwaves, droughts, wildfires that the effects of the climate crisis are indeed very real and felt today.

As Greta Thunberg says: “#MindTheGap between words and action.”

The GHG Protocol is the most widespread corporate standard for calculating emissions. This standard covers 3 scopes, all of which together form an entity’s footprint. This includes emissions related to the “use of product”. In other words, the emissions that a company’s product accrues when it is being used by consumers. Or, looking at Shell, the more Shell-pumped oil and gas is sold to fuel vehicles or power heating, the more Shell profits. Therefore, Shell must assume responsibility for that and ensure these emissions are mitigated.

While the number of countries with mandatory GHG reporting is increasing, the vast majority of these only requires reporting against scopes 1 & 2; scope 3 largely remains voluntary.

This is a dangerous shortfall.

As I argued in previous blogposts, scope 3 emissions will likely be the lion’s share of a company’s impact. In Mozilla’s case, for instance, 98% of its overall emissions were attributed to the use of its product.

If scope 3 emissions aren’t being accounted for, they won’t get mitigated.

Even if scope 3 emissions are included in a company’s environmental report, it is critical that responsibility cannot be deferred to someone — anyone — else. Otherwise, we will miss the necessary reduction targets.

This also means that corporate climate targets cannot just be a balance sheet accounting measure. Paying for offsets does not reduce your material impact. We need actual change, with real reductions.

Is it difficult? Yes.

Impossible? Hardly more so than facing and dealing with continuous extreme weather events as we have seen in just one month.

Going back to the Dutch court ruling, I can only repeat: It is groundbreaking. And we can only hope to see more companies undergoing similar scrutiny, forced to adhere to more ambitious targets spanning all 3 scopes of emissions reduction — be it by court order, or, ideally, stricter regulation.

I’ll note that Shell is unashamedly appealing the decision. They are on the wrong side of history.

--

--

--

Strategy expert, focusing in intersection of technology, human rights, global governance, and sustianability

Love podcasts or audiobooks? Learn on the go with our new app.

Environmental, Social, and Governance Investing: Is it a passing fad or a long-term trend?

Environmental ‘Champions’ set the high-water mark for climate action

NREL establishes world record for solar hydrogen production

Indonesia Brine Water Process for Underground Hydroelectric Power Plant

On-campus wind tunnels: “delightful” or dangerous?

Eureka! Europe’s Green Dream

Some thoughts on New Zealand’s Bird of the Year 2018

Listen Liberal! YOU are the cause of global warming! Because solar and wind are a Potemkin Village.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Cathleen Berger

Cathleen Berger

Strategy expert, focusing in intersection of technology, human rights, global governance, and sustianability

More from Medium

The overview of leading agricultural product of Southeast Asia: Good for invest

Independence From The Channel — The Essence Of The Digital Customer Experience

Looking Back At 2021: A Year of Milestones At dominKnow

Transforming Talent Insights — Issue #56 A-Maze 2022: Can Transformation Be Meme-Able?