It has been a vexing week for many environmentalists.
At ExxonMobil’s shareholder meeting on Wednesday, investors rejected all but one proposal to make the company more transparent about the risks climate change and climate policy could pose to its business. They also defeated a proposal to recognize the need to limit global warming to 2 degrees Celsius above pre-industrial levels.
Shareholders who supported the proposals weren’t happy about the outcome.
"Our company has chosen to disregard the consensus of the scientific community, the will of the 195 nations that signed the Paris agreement," Sister Patricia Daly, an ExxonMobil shareholder and sponsor of one of the climate-related resolutions, told The Associated Press.
But while ExxonMobil has perennially resisted proposals to acknowledge the full extent of climate risks, several European oil companies have not. In 2015, investors in BP, Royal Dutch Shell and the Norwegian firm Statoil all voted, nearly unanimously, in favor of resolutions similar to the ones ExxonMobil’s investors rejected on Wednesday.
Now, French oil giant Total has gone even further. On Tuesday, Total announced that it would shift its business strategy to support the goal of preventing world temperatures from rising more than 2 degrees Celsius above pre-industrial levels. The move shows that, despite dealing in planet-warming fuels, oil companies in the U.S. could take similar actions to reduce their contributions to climate change.
While Total isn’t ditching oil and gas completely, the firm plans to dial back production of oil from tar sands, forgo fossil fuel exploration in the Arctic and apply a price to carbon when assessing future investments, according to a report detailing its new strategy. ExxonMobil also prices carbon when making investment decisions, but some shareholders complain the company’s estimate of carbon’s cost is too low.
In the new report, Total CEO Patrick Pouyanné noted that investors had pushed the company to shift its business model.
“Our stakeholders are voicing higher expectations, understandably so,” he said. “Now it’s time for us to step up and explain how our strategies tangibly reflect this engagement."
Total has been investing in renewable energy for several years. In 2011, the firm purchased a controlling stake in SunPower, an American solar energy firm. In May, the company acquired battery maker Saft. The company billed the move as a bid to expand its renewable energy investments.
For an oil company, investing in renewable energy could be a prudent financial move. Oil prices, while slowly rising, remain low, and the renewable energy sector is growing. The volatility of the oil market is pushing several companies with large stakes in fossil fuels, including the Saudi Arabian-owned Aramco, to invest heavily in renewable energies.
Despite forays into renewables, Total is far from perfect. The company expects oil will continue to make up 50 percent of its energy mix by 2035, and the firm continues to explore new oil reserves in places like the North Sea. Total has also come under fire for supporting labor reforms in France that make it easier for companies to dock pay and sack employees.
At the end of the day, the company still sells a product that contributes to sea-level rise, drought, intense storms and a host of related problems.
“While [Total's] announcement stands in stark contrast to the actions we’re witnessing from companies like ExxonMobil and Chevron, it alone is not enough," John Coequyt, global climate policy director at the Sierra Club, said in a release. "The only real strategy for effectively tackling the climate crisis is to transition off of outdated dirty fuels and move toward 100% clean, renewable energy."
For environmental activist Bill McKibben, the best way to pressure oil companies to ditch fossil fuels is to divest from them altogether. Simply nudging them to adopt more climate-friendly practices is not enough, he said.
“Everyone's under pressure now, and as some [oil companies] start to crack, others will feel the need to follow suit,” McKibben told The Huffington Post. “The question is whether we can make it happen in time to catch up with the daunting physics of climate change.”
McKibben doesn’t think that’s likely. “It's now part of the conventional wisdom that the fossil fuel industry has more carbon in its reserves than we can ever burn -- that's why the divestment movement has been so successful.”