Learn about the gas giant accused of profiteering from the energy crisis, finance leaders embracing ESG, EU "due diligence" laws, and more, with our summary of this week's sustainability news.
10/02/23
This past week was filled with interesting sustainability and climate news, we’ve summarised the top stories below.
Shell directors sued over inadequate climate strategy
Directors of Shell are being sued over the company's inadequate climate strategy.
The lawsuit was filed by environmental lawyers, ClientEarth, in the high court of England.
The lawsuit is the first case in the world to hold corporate directors liable for failing to prepare their company for the transition to net-zero.
ClientEarth argues that the transition to low-carbon energy is inevitable and Shell's failure to adapt threatens the company's success and its investors' money.
Shell recently announced a record profit of $40bn, but has faced increasing legal and regulatory challenges as climate litigation increases globally.
The UK's largest workplace pension scheme, Nest, has also backed the lawsuit.
ClientEarth is asking the high court to order Shell's board to adopt a strategy to manage climate risk in line with the Companies Act.
The high court will decide if ClientEarth's claim will proceed.
Equinor accused of profiteering from energy crisis amid record earnings
After announcing record breaking annual earnings, Britain’s largest gas supplier, Equinor, has been accused of profiteering from the energy crisis and higher household bills.
Equinor reported $15.1bn in adjusted profits in Q4 of 2022, bringing total annual profits to $74.9bn.
The company supplies about 25% of Britain's gas and plans to develop the Rosebank oil and gas field off the coast of Shetland, despite opposition from climate activists.
Greenpeace UK's head of climate, Mel Evans, criticised Equinor for posting "record profits looted from bill payers' pockets while destroying the climate."
Evans stated that dependence on oil and gas is driving up bills and that only renewables and better insulated homes can lower both bills and carbon emissions.
ESG (Environmental, Social and Governance) is a key decision-making factor for UK finance functions, according to a survey by American Express.
Key findings:
89% of financial leaders consider ESG factors in business spending and investment decisions.
Most finance functions have KPIs and metrics already in place for: ethics (70%), carbon reduction (69%), employee diversity, equity and inclusion (66%), supply chain equality and fairness (64%), and energy use, reduction, or sourcing (63%).
Finance leaders have plans to implement KPIs for: Customer DE&I (35%), community outreach, giving, and philanthropy (33%), and climate risk (32%).
27% of finance functions consider environmental sustainability as a pressing challenge for 2023.
60% of finance leaders consider business travel important, with 46% expecting to spend more in 2023, but 77% acknowledge the need to balance with environmental sustainability.
EU lawmakers back expanding ESG "due diligence" requirement for companies
European Union lawmakers have backed an amendment to a draft legislation which would compel companies to check for negative impacts on the environment and human rights from their suppliers.
The draft law, named the Corporate Sustainability Due Diligence (CSDD), was proposed by the European Commission last year to push companies towards meeting net-zero climate targets.
The amendment expands the reach of the law to cover companies with more than 250 employees and an annual worldwide turnover of over 40 million euros.
The original draft set the threshold at 500 employees and a worldwide turnover of over 150 million euros, meaning fewer companies would need to comply.
The final decision on the law will be made by the European Parliament and EU states.
Few companies show credible climate transition plans according to CDP review
According to a report by CDP, a leading environmental disclosure platform, fewer than 0.4% of the 18,600 companies that provided data have credible climate transition plans.
The data highlights the gap between company pledges to reduce carbon emissions and the detailed plans needed to achieve those targets.
CDP's review found that only 81 companies disclosed information against 21 key indicators, which the platform says constitutes a credible plan.
This is a decrease from 135 companies last year, due to the platform raising the bar on what constitutes a credible plan.
The key indicators include board oversight, financial planning, and more.
CDP says that companies need to develop a credible climate transition plan as it is essential for averting the worst impacts of climate change and for sending positive signals to capital markets.
