ESGs a Distraction Tactic by Big Oil?

Many companies are prioritizing the reduction of their CO2 emissions, aligning their strategies with the roadmap followed by the oil and gas industry. This typically involves incremental changes such as improving energy efficiency, transitioning to renewable energy, and offsetting emissions. However, critics argue that this approach is insufficient for addressing the global climate crisis.

Activists proposes an alternative strategy: companies should hold fossil fuel corporations legally accountable for their significant contribution to climate change. By taking these companies to court, businesses could claim compensation for the environmental and economic damages caused by the fossil fuel industry's role in accelerating climate change.

This perspective emphasizes the need for bold, systemic action rather than relying solely on self-regulation or adherence to the fossil fuel industry's limited framework for emission reductions. It highlights the potential for using legal avenues to drive accountability and to fund broader climate solutions.

The COP29 climate summit in Azerbaijan has highlighted the ongoing failure to address climate change effectively. The event has seen low participation from major global players, with negotiations stalled. Wealthier nations are pushing for mechanisms to offset emissions, while poorer countries demand financial support. This divide has led to an impasse in discussions.

"The big players are barely present. The rich countries want more options for buying off their emissions, the poor countries mainly want to see money. The negotiations have now reached a complete impasse".

The Global Carbon Budget report warns of a dire situation: CO2 emissions are projected to hit a record 41.6 billion tons this year, driven by continued reliance on fossil fuels, which account for 75-90% of greenhouse gas emissions. Scientists caution that at the current rate, the world will exhaust its carbon budget within six years, locking in a global temperature rise beyond 1.5°C—the threshold for preventing the most severe impacts of climate change. Without immediate and substantial action, the opportunity to mitigate these effects will be lost.

Key Findings from the 2024 Global Carbon Budget:

• Globally, emissions from different fossil fuels in 2024 are projected to increase: coal (0.2%), oil (0.9%), gas (2.4%). These contribute 41%, 32% and 21% of global fossil CO2 emissions respectively. Given the uncertainty in the projections, it remains possible that coal emissions could decline in 2024.
• China’s emissions (32% of the global total) are projected to marginally increase by 0.2%, although the projected range includes a possible decrease in emissions.
• US emissions (13% of the global total) are projected to decrease by 0.6%.
• India’s emissions (8% of the global total) are projected to increase by 4.6%.
• European Union emissions (7% of the global total) are projected to decrease by 3.8%.
• Emissions in the rest of the world (38% of the global total) are projected to increase by 1.1%.
• International aviation and shipping (3% of the global total, and counted separately from national/regional totals) are projected to increase by 7.8% in 2024, but remain below their 2019 pre-pandemic level by 3.5%.
• Globally, emissions from land-use change (such as deforestation) have decreased by 20% in the past decade, but are set to rise in 2024.
• Permanent CO2 removal through reforestation and afforestation (new forests) is offsetting about half of the permanent deforestation emissions.
• Current levels of technology-based Carbon Dioxide Removal (excluding nature-based means such as reforestation) only account for about one-millionth of the CO2 emitted from fossil fuels.
• Atmospheric CO2 levels are set to reach 422.5 parts per million in 2024, 2.8 parts per million above 2023, and 52% above pre-industrial levels.
• The effects of the temporary El Ni?o climate event also led to a reduction in carbon absorption by ecosystems on land (known as the land CO2“sink”) in 2023, which is projected to recover as El Ni?o ended by the second quarter of 2024.
• Emissions from fires in 2024 have been above the average since the beginning of the satellite record in 2003, particularly due to the extreme 2023 wildfire season in Canada (which persisted in 2024) and intense drought in Brazil.
• The land and ocean CO2 sinks combined continued to take up around half of the total CO2 emissions, despite being negatively impacted by climate change.

The carbon obsession

Recent reports serve as ammunition for climate activists who believe that while corporate efforts to reduce CO2 emissions may not reverse the damage entirely, incremental contributions still matter. However, decades of emphasis on limiting emissions have led to the establishment of elaborate frameworks like ESG (Environmental, Social, and Governance) metrics. Critics argue that this focus has entangled businesses in excessive introspection, or "carbon navel-gazing."

Companies are said to be overly fixated on their own carbon footprints and individual impacts, which detracts from addressing the systemic nature of the climate crisis. Major societal shifts, according to these critics, rarely originate at the corporate or individual level. This approach may unintentionally perpetuate the dominance of the fossil fuel industry by maintaining the existing power structures instead of challenging them.

Oil and Gas Industry Roadmap

Current corporate sustainability practices, framed under ESG principles, may inadvertently support the fossil fuel industry's continued operations, critics argue. Instead of dismantling the structures fueling the climate crisis, ESG initiatives allow fossil fuel companies to adapt superficially, avoiding significant disruption to their business models while climate instability worsens.

"We need to pay more attention to the big picture. System change is the only path to climate stability. Everyone is operating within a narrow playing field. As a result, the thing we need to overthrow – the fossil fuel economy – remains untouched and unthreatened."

Achieving climate stability requires a shift from individual and corporate actions to systemic change. The fossil fuel economy, which is the root of the problem, remains largely unchallenged due to narrow approaches to sustainability. Activists emphasize that addressing climate change requires confronting this industry directly, a task hindered by decades of misinformation. For example, ExxonMobil and others have known since the 1950s about the harmful climate impacts of their products but chose to suppress this knowledge, delaying global climate action significantly.

To truly mitigate climate change, experts argue, society must shift its focus from piecemeal efforts to transformative system-wide change that directly targets the fossil fuel industry's dominance.

Blaming the Citizen

The planet experienced a peak average temperature increase of 1.8 degrees last year, yet fossil fuel companies continue to generate massive profits. To prevent exceeding 2 degrees of warming, most remaining coal, oil, and gas reserves must remain untapped. However, this would require ExxonMobil, Saudi Aramco, and similar companies to forgo over $33 trillion in expected profits over the next 25 years—an improbable scenario.

Activists are also frustrated by the fossil fuel industry's narrative that shifts blame for climate change onto individual citizens. This has led to a focus on personal carbon footprints, which are expensive for individuals to reduce. Meanwhile, taxpayers in wealthier Western nations bear the financial burden of funding hundreds of billions in climate reparations to poorer countries for damage caused by global emissions.

The Force is Strong With This One (Yoda)

Humanity must harness its positive potential to combat climate change, appealing to a universal consensus to protect families and children from immense suffering. The opportunity to prevent further climate disasters should motivate collective action across all sectors of society.

Businesses have a crucial role in maintaining a livable planet. While they must continue efforts to reduce emissions and adopt sustainable practices, companies also need to go further. They must exert significant influence on political processes, advocate for substantial policy changes, and actively contribute to a broader, unified movement to address the climate crisis. Collaboration between concerned citizens, organizations, and businesses is essential to drive impactful actions and innovative solutions for a sustainable future.

More effective results

PepsiCo and Google illustrate a paradox in corporate sustainability. PepsiCo actively reduces greenhouse gas emissions across its operations and supply chain, yet supports organizations that lobby against climate-friendly regulations. Similarly, Google boasts achievements in clean energy use, energy efficiency, and carbon offsets while avoiding direct advocacy for impactful climate policy.

There is significant untapped potential for companies to achieve meaningful climate progress. Resources currently spent on lobbying for favorable trade conditions could instead support climate advocacy. Funds used to purchase carbon offsets could be redirected toward innovations and practical measures to reduce emissions at their source. Additionally, financial institutions supporting fossil fuels could be replaced with sustainable alternatives to align corporate practices more closely with climate goals.

Compensation Lawsuits

The approach of climate movements is beginning to resemble that used against the tobacco industry, where lawsuits have forced companies to pay for the harm caused by their products. Environmental organizations like Milieudefensie have initiated legal actions, such as suing Shell for its role in climate damage.

There is also potential for companies themselves to file lawsuits. For instance, ExxonMobil has long been accused of deliberately concealing scientifically proven evidence of its contribution to climate change. Activists argue that such behavior makes the company liable for the extensive and long-term consequences of global warming.

Higher Costs Due to Climate Change

Many environmental organizations are reluctant to pursue lawsuits against massive entities like ExxonMobil due to their size and resources. However, legal action remains a promising strategy to combat climate change, as history has shown its effectiveness. The law is viewed as one of the few powerful tools available to address this global crisis.

Corporations could evaluate how climate change causes harm—such as financial losses from reduced snowfall, water shortages, rising sea levels, droughts, wildfires, floods, or increased operational costs—and explore avenues for claiming compensation. These claims might target damages to infrastructure, lost profits, or demand fair reparations.

A landmark moment would be if a significant private-sector entity sued a fossil fuel company for climate-related damages. Such a legal precedent could shock the industry and potentially drive systemic change.

Positioning a Company as a Leader

The primary goal of climate-related lawsuits is not necessarily to win but to elevate the global climate issue, innovate the fight against climate change, and position companies as leaders in climate action. These lawsuits aim to reshape narratives in media and politics, foster the development of new climate laws, and amplify awareness of the crisis.

While solving the climate problem will be more difficult than ‘winning World War II, achieving equal civil rights, defeating bacterial infections, ending slavery, and sending Neil Armstrong to the moon, all at the same time’.

However, achieving this is an uphill battle. In the U.S., policies under leaders like Donald Trump, who support unrestricted fossil fuel exploitation, represent significant setbacks. Addressing the climate crisis is described as more complex than combining history’s monumental achievements, from ending slavery to landing on the moon.

Donald Trump will give the fossil fuel industry free rein: ‘drill, baby, drill’.

Despite these challenges, there is optimism. Humanity’s track record of overcoming seemingly insurmountable problems suggests that progress, though difficult, is possible with collective effort and determination.

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