Guest essay by Eric Worrall

Instead of say investing in green energy startups and displacing oil with a better product, business guru Jeroen Kraaijenbrink thinks activists should buy shares so they can mess with big oil companies.

Jan 3, 2022,09:00am EST

Want To Stop Climate Change? Buy Big Oil Stock

Jeroen Kraaijenbrink
Contributor Leadership Strategy
I Help Companies Discover, Formulate And Execute Strategy

In an age in which stock trading is no longer reserved to Wall-Street and a climate crisis is becoming a reality, sustainability-driven shareholder activism was bound to happen. And we see it happening, with increasing impact—especially in Big Oil, responsible for the largest share of the world’s greenhouse gas emissions. 

Long has the traditional shareholder model of corporations been a source of criticism, especially from a sustainability perspective. As the criticism goes, shareholders have no interest in the long-term health of a company, and most certainly not in anything that concerns the world outside the corporation—like the health of our planet and its population. 

But, this may be changing. Paradoxically, it may be this very same traditional shareholder model that can be key to fight climate change, achieve COP26 ambitions, and realize UN’s Sustainable Development Goals. I spoke to Mark van Baal, founder of activist shareholder group Follow This, to discuss the merits and perils of shareholder activism, in particular with respect to climate change and Big Oil. 

How Follow This Fights The Battle Against Climate Change

In Van Baal’s words, Follow This is “a group of over 8,000 green shareholders in oil and gas companies.” Their goal? “To get oil companies to set clear Scope 3 ambitions and targets. This means that they do not only take responsibility for their own emissions, also called Scope 1 and 2, but for all emissions in the value chain. This includes emissions caused by the products made from oil, transport, and so on. Since oil companies are not doing this on their own, they need an extra stimulus and support to get such ambitions and targets on the agenda to meet the Paris climate agreement.” 

Their approach is as simple as it is effective. Their impact has already been made apparent at multiple Big Oil names, turning these corporations in the right direction when it comes to climate change. “Thanks to the votes of institutional investors for the Follow This climate resolutions, Shell, Equinor, BP, Phillips 66, and Chevron have reluctantly set climate ambitions covering Scope 3 already.” And, as Follow This announced in their recent investor briefing, they will file no less than eight climate resolutions in 2022, at Shell, BP, Chevron, ConocoPhillips, Phillips 66, Occidental Petroleum, ExxonMobil, and Marathon Petroleum.

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Read more: https://www.forbes.com/sites/jeroenkraaijenbrink/2022/01/03/want-to-stop-climate-change-buy-big-oil-stock/

In my opinion such wrecking tactics are evidence that greens know they can’t produce a viable alternative to fossil fuel.

If a green startup created an economically competitive technology for say producing gasoline out of thin air, using a solar reactor or nuclear fusion or whatever, oil companies would be all over it. Not to suppress it, but to exploit it, by buying the patent and using it against their competitors.

Oil companies have no loyalty to drilling for oil – they just want to make money, bigger bonuses for executives.

The proof – when crude oil became really expensive in 2009, executives started dusting off the old NAZI coal to oil process.

The NAZIs pretty much ran their entire wartime economy on coal, because they didn’t have access to big oil fields.

The NAZIs weren’t happy with coal to oil, they were desperate for direct access to oil. One of the reasons Hitler invaded Russia is he wanted to seize the Russian oil fields in the Caucasus. Although the coal to oil process works, it is more difficult and expensive than directly processing crude oil, which put the NAZI forces at a logistical disadvantage through much of the war.

But the original plans for the NAZI production scale coal to oil process are still on file, in the research departments of every oil company, waiting to be dusted off next time there is a sustained oil price spike.

My point is, producing product is the goal of oil executives. They don’t care whether the product comes from crude oil, biofuel, coal, or thin air and a nuclear reactor, their core goal is keeping their well paid jobs, along with a big fat executive bonus from all the profit their business units make.

If greens had any economically viable ideas to contribute, they wouldn’t need such dirty tactics, like buying oil company shares and trying to mess with them. They could just start their own green energy company, and sweep the field with their superior product.