Pressure campaigns are forcing oil giants to reinvent themselves

Good morning, and welcome back to Fortune’s newsletter on sustainability, climate change, energy and green tech—formerly known as The Loop, revived as Green, Inc., and piped to your inbox every Wednesday.

I’ll be alternating authorship with Fortune editor Katherine Dunn, who covers much of the world’s energy news from her base in London.

A few things have happened since we went on hiatus last October. The deluge of corporate carbon-neutral goals continued. The six biggest banks in the U.S. pledged to finance the transition away from fossil fuels. Bitcoin went mainstream and was pummeled by critics for its huge carbon footprint. And, just last week, Big Oil had a big reckoning.

If you missed it, The Hague district court issued a landmark ruling against Shell that set precedent for courts to hold companies accountable for pollution on human rights grounds. A similar case is pending against France’s Total, as lawsuits become a popular avenue for climate change activists.

Meanwhile, shareholders at Chevron passed a resolution demanding the company cut Scope 3 emissions—that is, carbon emitted by Chevron’s customers—while activist investor Engine No. 1 secured two seats on Exxon’s board, despite the oil giant fighting a bitter campaign against the minority shareholder.

Engine No. 1 wants Exxon to reinvent itself as a climate-conscious energy company, rather than the fossil fuel firm it is currently. Clearly, Exxon’s shareholders see the logic behind Engine’s plan. The oil major has witnessed a phenomenal decline from its position as the world’s largest company by market cap.

Last year, Exxon posted $22 billion in losses, down from a $14 billion profit in 2019, amid plummeting pandemic demand. Exxon’s loss cut the Texas company down seven rungs to 10th place on the new Fortune 500—which published today.

Katherine has a tremendous write-up of Exxon’s tribulations, which I urge you to read here. The big question: can Exxon’s management truly embrace the change investors are compelling it to make?

More news below,

Eamon Barrett
– eamon.barrett@fortune.com

CARBON COPY

OPEC says

Oil prices hit a multiyear high Tuesday after leaders of OPEC+ forecast higher demand and agreed to boost output by roughly 450,000 barrels per day (bpd), starting next month. The cartel is gradually easing back production cuts it implemented during the peak of the pandemic. Last year, OPEC+ agreed to reduce production by 9.7 million bpd. The group aims to restore 2.1 million bpd between May and July. WSJ

Chip drought

Taiwan is enduring its worst drought in 50 years, exposing the cracked beds of the island’s reservoirs and lakes. The drought is a crisis for Taiwan’s semiconductor manufacturers, which use water to hose off chemicals. The world’s leading chip maker, TSMC, says the drought hasn’t interrupted operations, but the chip maker has trucked in tankers of water for the first time since 2015. Reuters

Banking on it

Over 99% of HSBC shareholders voted to phase out coal financing by 2040 and to align the bank’s lending practices with targets of the Paris Agreement. Meanwhile regulators are increasing pressure on European banks, too: the Bank of England launched its first environmental stress test this month; the European Central Bank has scheduled a test for next year. But when it comes to reporting climate risk, banks don’t follow a unified approach. Nikkei

Cooking with gas

Across the U.S., major cities are debating whether to phase out gas supplies for home cooking and heating. According to the Environmental Protection Agency (EPA), homes and business account for 13% of U.S. annual greenhouse gas emissions, mostly because natural gas is used in cooking and utilities. WSJ

Data costs

Electricity consumption from data centers and 5G base stations in China will increase 289% by 2035, according to a study from Greenpeace. Although electricity usage isn’t inherently bad, the majority of China’s electricity comes from coal and China’s leading data center managers, Alibaba and GDS, have yet to set carbon neutrality goals. Greenpeace

Cow converter

Food giant Cargill wants to sell an experimental gas mask for cows that can supposedly reduce bovine methane emissions by up to 50%. The masks convert methane into carbon dioxide, which is also a greenhouse gas—but methane traps 80 times more heat than carbon dioxide does. The masks are an archetype of the “tech will save us from climate change” argument, but the U.K. start up Zelp—which created the mask—has yet to prove its product works. Bloomberg

IN CASE YOU MISSED IT

Can a country with no livestock become a meat producer? Singapore is going to try by Simon Willis 

How a Birmingham-based start up is trying to solve the electric economy’s next big challenge by Sophie Mellor 

Ethereum founder Vitalik Buterin says long-awaited shift to ‘proof-of-stake’ could solve environmental woes by Yvonne Lau 

Instant noodle empire dips in debut after staging Philippines’ biggest-ever IPO by Yvonne Lau

CLOSING NUMBER

37%

More than a third of heat-related deaths between 1991 and 2018 can be attributed to human-induced global heating, says a study published Monday in Nature. Researchers used past weather conditions to develop a baseline of heat-deaths that might have occurred without climate change. Last August a report predicted that, by the end of the century, rising temperatures could kill as many people per year as all infectious diseases.