Many people ask me why Milieudefensie focuses its efforts on holding multinational corporations accountable for climate change. They wonder whether we should just leave the climate crisis for governments to solve or point at the necessary changes in consumer behavior.
What this fails to recognize is that without a fair contribution of the world’s multinationals, it will be impossible to limit global warming to 1.5 °C. I will give you three reasons why this is the case.
First, these globally operating corporations exercise significant influence on political and regulatory centers to protect their business interests. This has created a regulatory gap. Their lobbying power enables them to impact climate policy wherever they are active. They pressure their host countries to water down or abolish unfavorable climate regulation. Consider the threats of Boskalis’ CEO Peter Berdowski to leave the Netherlands due to the proposed legislation on international corporate social responsibility. This is a common tactic for multinationals to get what they want. In our globalized economy, multinationals and their corporate financial interests largely rule the world.
Second, multinationals control a much larger share of global greenhouse gas emissions compared to most individual countries. For example, Shell controls almost 1.4 billion tons in greenhouse gas emissions, or about 2.5% of all worldwide emissions. If Shell were a country, there are only four countries in the world that have control over more emissions: China, the USA, India and Russia. Multinationals therefore equal countries or even superpowers when it comes to controlling worldwide emissions. Without their proactive transformation, no real change is possible.
Third, multinationals have more direct control over emissions compared to national governments. The directors of these globally operating corporations decide on the strategy, risk management and corporate climate policy for the entire international group. This means that their corporate decision-making has an immediate global effect. Shell’s board of directors decides if the international Shell group will invest in new oil and gas fields or in renewable energy. The same goes for financial institutions: executives of banks and pension funds decide whether to finance new fossil fuels projects or to align their investments with the goals of the Paris Agreement.
Overall, what these corporations and financial institutions do or don’t do will make or break the goals of the Paris Agreement. And therefore, what these corporations and financial institutions do or don’t do in the next few years will determine our collective future on this planet.
It is therefore not surprising that countries have called for proactive climate action from the private sector for more than a decade already. They know that they cannot do it alone. In spite of this, multinationals are still not voluntarily contributing to the urgent and system-wide transformation that is necessary to achieve the goals of the Paris Agreement. As UN Secretary General Guterres pointed out just last month, “fossil fuel producers and their enablers are still racing to expand production, knowing full well that this business model is inconsistent with human survival.”
In this dangerous deadlock that politicians are unable or unwilling to address due to the regulatory gap, we – citizens and civil society organizations – are rightfully calling for accountability of these colossal corporates. And we have one simple and fair ask: we need multinationals to reduce the greenhouse gas emissions of their activities and products in line with the Paris Agreement. In essence, we are asking multinationals to help preserve a livable planet and protect the human rights of people around the world. Not an unreasonable request, is it?
If they fail to do so immediately, there is a clear and convincing case that multinationals are in violation of a legal responsibility to reduce emissions. This means they can be forced to change and be held liable for the damages and destruction caused. After all, climate change poses grave risks to the lives, goods and well-being of people around the world and threatens our human rights at the core. This relationship between climate change and human rights is a well-established fact that has been recognized by the highest courts of many countries. The notion that businesses have an independent legal obligation to respect human rights is also hardly controversial.
Pushing for corporate accountability for climate change is therefore not a political or ideological issue, it is a human rights issue built on overwhelming evidence and universal consensus.
As citizens, we should be grateful to live in a democratic society under the rule of law, where the actions of not just our government, but also private actors can be scrutinized to bring them in line them with our most fundamental norms and values. We should applaud that courts are willing to step in and provide protection for the world’s most pressing problems.
The many successes in climate litigation are a prime example of how our courts are delivering justice, just as the courts have held Shell accountable for the devastating impacts of oil pollution on communities in Ogoniland, Nigeria.
For those eager to learn more and deepen their understanding on these issues, I invite you to read our climate litigation manuals and the legal documents available on Milieudefensie’s website, including the letter we sent to Shell’s board of directors last year. For multinationals, their directors and enablers, I encourage you to step up your efforts in this decisive decade and consider that failing to do so will have legal implications.