Shell Knew About Climate Risks Since the 1980s, Will it Act Now?

April 6, 2018 | 12:04 pm
Shell sign in gas stationDavid Nagy
Kathy Mulvey
Accountability Campaign Director, Climate & Energy Program

The year is 1988. The Wonder Years debuts on TV, George Michael’s “Faith” tops the Billboard charts, gas costs $1.67 at the pump, the U.S. Surgeon General states that the addictive properties of nicotine are similar to those of heroin and cocaine, and Royal Dutch Shell writes a confidential report on climate science and its own role in global warming. This report is one of dozens of internal documents unearthed by journalist Jelmer Mommers of De Correspondent and posted this week on Climate Files that shed more light on what Shell knew decades ago about the risks of burning fossil fuels.

These documents are enormously significant in efforts to hold the company accountable to its stated support for the Paris Climate Agreement. Their release comes a week after Shell rolled out its Sky scenario illustrating a possible pathway for the world to achieve the goal of keeping global temperature increase well below 2 degrees Celsius—and sets up a showdown leading into the company’s annual meeting in The Hague next month, with Shell facing mounting pressure from climate litigation and its own shareholders.

“…it could be too late…”

The Greenhouse Effect,” a 1988 document marked “CONFIDENTIAL,” details Shell’s extensive knowledge of climate change impacts and implications. It includes this sobering observation:

“However, by the time the global warming becomes detectable it could be too late to take effective countermeasures to reduce the effects or even to stabilize the situation.”

Let that sink in. Shell knew in 1988—30 years ago—the enormous risks of fossil fuels. Not just that greenhouse gas emissions would warm that planet, and that the contribution of its products to heat-trapping emissions could be calculated (as scientists have since done in peer-reviewed research), but that in order to avoid impacts we needed to take action. Those detectable impacts—rising seas, wildfires, flooding, extreme heat—are now affecting every corner of the globe. A 1991 Shell video revealed last year by The Guardian warned of climate change “at a rate faster than at any time since the end of the ice age—change too fast perhaps for life to adapt, without severe dislocation.”

Yet what did Shell do? Along with other major fossil fuel companies, it deceived the public about the risks of its products and kept us on a path of unabated fossil fuel extraction. By 1994, Shell was emphasizing uncertainties in climate science in an updated internal document titled “The Enhanced Greenhouse Effect.” As my colleague Peter Frumhoff told Climate Liability News, “The company goes from saying ‘if we wait until all the scientific questions are answered it may be too late’ to saying ‘we have to wait until all of these scientific questions are answered.’”

Legal Challenges

The newly-released documents are likely to be relevant in climate-related litigation targeting Shell and other major fossil fuel companies. This week, Friends of the Earth Netherlands / Milieudefensie demanded that Shell align its business model with the Paris Climate Agreement or face legal consequences. The organization says it will sue the company if it fails to take action within eight weeks.

The Dutch lawsuit would compound the legal trouble Shell faces from lawsuits by New York City and several California communities over its contributions to climate change. Yet unlike those suits, which seek to recover costs to address climate damages and prepare for future impacts, this case would be the first to call for action by a company to prevent further climate change. It would open a new frontier in climate liability, and in efforts to use the courts to hold corporations accountable to human rights obligations and broad societal norms.

Shareholder concerns

Shell’s deadline to respond to Milieudefensie comes just a week after the company’s annual general meeting, scheduled for May 22 in The Hague. In its latest filing with the U.S. Securities and Exchange Commission, Shell acknowledged financial risks associated with “lawsuits seeking to hold fossil fuel companies liable for costs associated with climate change.” Shareholders should grill company decision-makers about the implications of the newly-released internal documents for current and potential litigation against Shell.

Some shareholders are already calling for changes to Shell’s business model similar to those outlined in the Milieudefensie liability letter. The Dutch organization Follow This has again filed a shareholder resolution requesting that Shell “set and publish targets that are aligned with the goal of the Paris Climate Agreement to limit global warming to well below 2°C.”

Shell launched its Sky scenario last week with great fanfare, and won praise for its pledge last November to double spending on clean power and halve the carbon footprint of the energy it sells by 2050. Shell has gone farther than many of its peers in analyzing what a 2°C or lower scenario would mean for its business, addressing mainstream investor expectations such as the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). Yet serious questions remain, including about the company’s reliance on yet-to-be-developed technologies to achieve negative emissions—read more here and here and here.

Just over a year ago, Shell CEO Ben van Beurden remarked that, “Trust has been eroded to the point where it is an issue for our long-term future.” With this week’s revelations, erosion has turned into a mudslide.

Thanks to my colleagues Jean Sideris and Ja-Rei Wang for their contributions to this blog.