Atypical climate activist shareholder uses counterintuitive ploy to make ‘big oil’ change their ways

Mark van Baal realised by becoming shareholders in big oil and gas companies, we can change policy from within and actually compel them to fight climate change by putting their brains and billions behind renewable energy.

‘Follow This’ compel oil and gas companies to stop climate change from the inside

Investing in a major oil company might not seem particularly environmentally friendly at first glance, but it’s the approach advocated by a Netherlands-based group of activist shareholders ‘Follow This’. Big oil companies can make or break the Paris Climate Agreement, and they listen to nobody but their shareholders. So by purchasing the minimum shares required to be in a position to table motions, ‘Follow This’ has become a major international player pressuring the oil industry, filing resolutions in five different oil majors in Europe and the U.S.

AGM season closes with a third shareholders’ rebellion over non-committal “climate ambitions”, following Shell and Equinor Total has failed to deter shareholders from seeking concrete action to curb emissions, despite announcing a new climate ambition. At the company’s AGM in May, 16.8% of shareholders voted for a climate targets resolution, against the advice from Total’s board. The results show a rising proportion of principled investors are not persuaded by Total’s announcement of a new ambition to reach “net zero by 2050”. The voting follows the same pattern seen at the AGMs of Shell and Equinor earlier this year, a sharp increase when compared with 2018, when the same resolution secured votes from 5.5% of investors in Shell. Ordinarily, 99% of shareholders vote according to management advice. Source: follow-this.org

In order to change big oil, you have to become a shareholder

In 2002, Mark van Baal was fed up with travelling throughout Europe selling refrigeration machines for shipping containers—something he felt was not socially responsible—so he decided to become a journalist. After seeing Al Gore’s documentary An Inconvenient Truth, in 2006, he found himself writing more and more about global warming. 

“I became increasingly convinced that the fossil fuel industry would have to change. Renewable energy holds enormous opportunities for these companies, and  making the switch to a sustainable energy company is the only chance that they have to survive.”

Unfortunately, writing about the need for change did not have the desired effect. “After ten years I came to the conclusion that Shell does not listen to journalists, nor to activist groups, nor to governments. The only ones who can convince Shell to choose another course are its shareholders.”

Van Baal saw that in order to change Shell, he would have to become a shareholder. 

“I knew that one small shareholder can change the course of a company,” he says. The thinking was, if you can buy enough shares to submit a resolution to the shareholders’ meeting, then I will only have to convince the other shareholders. He called his idea Follow This.

The idea quickly took shape. Submitting a resolution requires at least 5 million euros in shares, so in 2015 he united big and large shareholders, convincing large shareholders to contribute and putting up a website where anyone could buy a share for about thirty euros. 

But it didn’t go all that quickly. “The first months were really difficult,” he relates. “How often have I heard people say, ‘Oh, you want to change Shell. That’s a noble cause.’ They didn’t believe that we would actually succeed. 

In a viral video that’s doing the rounds, you see a young guy dancing in a park for several minutes all by himself. After a while a couple of others join him – the first followers – and then it takes off and a whole crowd joins in. “When I decided that I wanted to change Shell my wife showed me the video clip, and said, ‘That’s what you are going to do.’ And she was right.”

Eventually, more and more people got in touch and wanted to help with the mission of Follow This. The team of volunteers supporting Follow This grew larger and larger. “I am impressed every day by the drive and the brainpower of our young team members: students and recent graduates who are looking for work with a purpose.”

Continued below…

Source: Follow-This.org

Green shareholders change the world In the coming years we will find out whether halting climate change will even be possible. But one thing is certain: If we let the oil industry have their way for another five years, we don’t have a chance. Source: follow-this.org

It takes guts to tackle one of the biggest companies in the world alone

Shell reacted half a year later by announcing a ‘climate ambition’ as the first oil company in the world to do so.

In 2018, Follow This filed at Shell again, and this time the company considered it ‘unnecessary’ to accept the resolution of Follow This, as can be seen in a heated altercation between Van Baal and Shell’s CEO, Ben van Beurden. And yet, nine of the ten biggest Dutch investors turned a blind eye to Van Beurden’s appeal. “Of the shareholders voting, 5.5% voted for the resolution and 7% abstained, which means that nearly 13% no longer support the Shell board,” says Van Baal.

It takes guts to tackle one of the biggest companies in the world alone. But it turns out that it is in fact working. Follow This now has a committed team and a growing group of 5,000 responsible shareholders, and is well-known amongst all major European oil majors, investors, and international media.

Shell’s climate ambition does not yet go far enough. “According to this ambition, Shell will halve its carbon footprint by 2050. But a relative reduction of 50% (an absolute reduction of 30%, because energy demand will grow) is not nearly enough to achieve the goals of the Paris climate agreement.”

“The entire industry will have to come around. Oil and gas companies will only survive if they become more sustainable, and without them we will never be able to achieve the Paris climate goals. If that happens, we will all be in much more danger. And it is not just our investments that are endangered, but our safety.”

In the coming years we will find out whether halting climate change will even be possible. But one thing is certain: If we let the oil industry have their way for another five years, we don’t have a chance. 

Source: Follow-This.org

Based on an interview with Lisa Boerop for Business Insider Netherlands, and translated.