Shell, one of the largest energy companies in the world, emits a significant amount of CO2 annually: a massive 3% of all global emissions (1). Only the US, Russia, China and India emit more than Shell (2). Milieudefensie has been campaigning for years to compel Shell to reduce its emissions. In 2021, Milieudefensie won a lawsuit against Shell, in which the court ruled that the company must reduce its CO2 emissions by 45%, so-called scope 1 emissions (3). On top of that, Shell also needed to reduce emissions of its suppliers (scope 2) and of the users of its products (scope 3) by 45%. It was especially this last scope that Shell was hesitant about. Shell has appealed this decision, arguing that it is not up to the court to decide how climate change should be addressed, but rather the politicians. Shell also argued that similar industries would step in to fill their place, suggesting that the verdict would have little real impact. Additionally, they claimed that society isn't ready for such a drastic shift, warning that it could lead to an energy crisis—a point that seems somewhat contradictory to their first argument. Shell claims that companies are powerless and that the political sphere must resolve the issue (4). But is that really the case?

Historical contributions and ethical duty – retrospective responsibility

Since the industrial revolution, the influence of humans on climate has increased rapidly (5). CO2 and methane are the main reasons why the global temperature is rising (6). The use of fossil fuels further increased CO2 emissions. Governments around the world struggle to implement effective measures, and many people wonder if politicians are doing enough to combat global warming. In this context, the question arises whether companies should take matters into their own hands.

The recent case between Milieudefensie and Shell illustrates the tension between the responsibility of companies and governments in tackling the climate crisis (7). Beyond Shell, there are countless other companies, particularly in the fossil fuel industry, that contribute to the climate problem. Globally, 100 companies have been responsible for 70% of greenhouse gas emissions since 1970 (8)(9). Exxonmobil, BP, Total, Maersk, and China Energy are all in the list of those 100 companies (10).

Retrospective responsibility involves holding individuals or organizations accountable for past actions that caused harm. In the Netherlands, the principle of retrospective responsibility is reinforced by jurisprudence such as the Kelderluik-arrest, which established criteria for liability, including foreseeability of harm and duty of care. This legal foundation was key in Milieudefensie’s landmark case against Shell, where the court ruled that Shell must reduce its emissions in line with the Paris Agreement. This decision emphasized that companies with a history of environmental harm bear a responsibility to act in addressing the climate crisis (11). If responsibility is defined retrospectively, it seems logical to involve businesses that have contributed to climate change in addressing it, if not making it their responsibility entirely.

Duty of businesses – prospective responsibility

Contrary to retrospective responsibility, prospective responsibility focuses on duties tied to a role or task, emphasizing future actions. Companies like Shell often invoke this concept to shift accountability, arguing that governments bear the responsibility for reducing emissions through policymaking and regulation. Shell contends that its role is to meet energy demand within the rules set by governments, not to determine those rules (12). This argument frames governments as the primary drivers of systemic change, responsible for measures like carbon pricing, emissions caps, and renewable energy incentives. However, Shell’s stance downplays its capacity to lead by example. With significant resources and expertise, companies like Shell have the ability—and the responsibility—to actively transition toward more sustainable practices. While government action is essential, companies also have a clear duty to innovate, invest in renewable energy, and reduce their carbon footprint. Achieving meaningful climate progress requires efforts from both policymakers and businesses.

The consequences of climate change are already being felt globally, particularly in developing countries. Rising sea levels, extreme weather conditions, and droughts disproportionately impact these vulnerable communities (13)(14). While Western companies have benefited from fossil fuels for decades, developing countries bear the brunt of the climate crisis. Companies can play an absolutely crucial role in this by investing in sustainable energy projects in these regions.

Globally responsible

The tension between retrospective and prospective responsibility highlights the need for shared solutions to the climate crisis. Governments, corporations, and society must work collaboratively, combining past accountability with future commitments to address environmental challenges effectively. Governments can set clear frameworks, such as binding emissions targets and financial incentives, ensuring accountability for past harm while guiding future action. Corporations like Shell, with their resources and influence, should take proactive steps, including substantial investing in renewable energy, innovating low-carbon technologies, and aligning business practices with climate goals. Society plays a crucial role as well, driving change through consumer choices, activism, and community engagement. Partnerships can align public policies with corporate strategies and societal needs, ensuring both justice for past actions and a sustainable future.

There are companies that set a positive example. Stregra, previously called H2 Green Steel, illustrates corporate responsibility in combating climate change, complementing government efforts. Located in northern Sweden, the company is revolutionizing steel production by replacing coking coal with green hydrogen derived from hydroelectric power, reducing emissions by 95%. Their innovative €6.5bn project, set to begin production in 2026, not only showcases sustainable industrial practices but also positions Europe as a leader in green technology. With support from government subsidies, regulatory frameworks like the EU's emissions trading system, and partnerships with manufacturers like BMW and Volvo, Stegra demonstrates how businesses and governments can collaboratively drive decarbonization at scale (15).

In conclusion, while governments play an essential role in creating favorable climate policies, companies can no longer sit back and wait for politicians to solve the problem. By taking the initiative and investing in sustainable solutions, companies can not only reduce their own environmental impact but also make a positive contribution to the global fight against climate change. Shall we?

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Sources:

1. NRC. “Wat er op het spel staat in het hoger beroep van Shell”. Podcast. Accessed November 18, 2024.
2. ibid
3. ibid
4. ibid
5. Rijksoverheid. “Gevolgen klimaatverandering.” Accessed November 18, 2024.https://www.rijksoverheid.nl/onderwerpen/klimaatverandering/gevolgen-klimaatverandering#:~:text=Sinds%20de%20industri%C3%ABle%20revolutie%20is,stijgt%20de%20temperatuur%20op%20aarde.
6. ibid
7. NRC. “Wat er op het spel staat in het hoger beroep van Shell”. Podcast. Accessed November 18, 2024.
8. Natuur & Milieu. “Schone Industrie.” Accessed November 18, 2024.https://natuurenmilieu.nl/project/schone-industrie/#:~:text=Wat%20is%20het%20probleem%20%3F,verwerking%20van%20grondstoffen%20tot%20producten.
9. Business Insider Nederland. “Hoe bedrijven voorop kunnen lopen bij de aanpak van de klimaatcrisis.” Accessed November 18, 2024.https://stories.businessinsider.nl/hoe-bedrijven-voorop-kunnen-lopen-bij-de-aanpak-van-de-klimaatcrisis/index.html
10. Oxfam Novib. “Shocking: Deze 100 bedrijven hebben grote impact op jouw leven.” Accessed November 18, 2024.https://www.oxfamnovib.nl/blogs/dilemmas-en-oplossingen/shocking-deze-100-bedrijven-hebben-grote-impact-op-jouw-leven
11. NRC. “Wat er op het spel staat in het hoger beroep van Shell”. Podcast. Accessed November 18, 2024.
12. NRC. “Wat er op het spel staat in het hoger beroep van Shell”. Podcast. Accessed November 18, 2024.
13. The Conversation. “COP29: Who Pays for Climate Action in Developing Nations, and How Much, Becomes More Urgent.” Accessed November 18, 2024.https://theconversation.com/cop29-who-pays-for-climate-action-in-developing-nations-and-how-much-becomes-more-urgent-242678
14. United Nations Sustainable Development Group. “Ambitious New Climate Finance Goal Entirely in Self-Interest of Every Single Nation.” Accessed November 26, 2024.https://unsdg.un.org/latest/stories/ambitious-new-climate-finance-goal-entirely-self-interest-every-single-nation-un
15. Richard Milne, "Sweden’s H2 Green Steel Begins Work on €6.5bn Carbon-Cutting Project,"Financial Times, November 22, 2023,https://www.ft.com/content/f1c5bf2d-b4a0-485e-99f1-7eea540b833a.