A recently discovered classified Shell document from 1989 confirms suspicion that fossil fuel companies had early knowledge of their impact on the environment but continued with business as usual. In this report, Shell considers two different scenarios for the future based on GHG emissions and considers efforts to either capitalize on or reduce fossil fuels. The scenarios are split between “sustainable world,” which “addresses the potential problem and greatly reduces emissions,” and “global mercantilism,” which capitalizes on fossil fuels. The greatest difference between the two scenarios is in carbon dioxide (CO2) emissions. 

By 2050, the report projects that CO2 emissions will have doubled in “global mercantilism,” while CO2 emissions reduce to 1972 levels in “sustainable world.” Interestingly, Shell’s projections for “global mercantilism” are strikingly similar to the CO2 levels we are experiencing today. This document also addresses a host of problems that come with the “global mercantilism” scenario – dramatic temperature changes, climate refugees, ecosystem disruption – all of which we are seeing and experiencing today. 

“The oil, gas, and coal companies, unsurprisingly, take a dim view of our perspective that they bear substantial responsibility for the climate impacts, costs, and damages caused by the use of their products.”

Shell’s analysis of these scenarios and clear choice of “global mercantilism” shows its blatant disregard for non-fiduciary stakeholder interests. Fossil fuel companies like Shell have known about the consequences of their actions for at least 35 years, yet have continued to not only supply fossil fuels, but promote the narrative that consumers are primarily responsible for the demand of such emissions. 

Despite increasing recognition that fossil fuel companies are responsible for excessive GHG emissions, these companies continue to hold that they are merely fulfilling consumer demand for energy, gas, coal, meat, and so on. According to Heede, “the oil, gas, and coal companies, unsurprisingly, take a dim view of our perspective that they bear substantial responsibility for the climate impacts, costs, and damages caused by the use of their products.”

This dynamic is exemplified in an ongoing case in the Netherlands between Shell and Milieudefensie (Friends of the Earth Netherlands). In 2021, The Hague found that Shell violated its duty of care and human rights obligations by failing to adequately curb its climate change contributions and ordered Shell to cut its carbon emissions by 45% by 2030 compared to 2019 emissions. Shell is appealing, arguing that they are an innocent corporate actor merely fulfilling consumer demand. 

In its appeal, Shell is arguing that its “actions alone cannot change the global energy mix,” but rather that the “energy transition requires collective action from society as a whole and must be underpinned primarily by national legislation and regulations.” Further, Shell is arguing that “the world’s demand for energy is not simply created by the producers who supply that energy,” but is “primarily driven by end users and consumption patterns.” Like many corporations, Shell maintains that have no control over Dutch emissions, but rather are passively meeting consumers’ continuous and voracious demand for fossil fuels.

The Illusion of Consumer Control

What corporations fail to mention when pushing this narrative is that most individual carbon consumption is beyond one’s control. Fossil fuel companies have helped shape a society so reliant on GHGs that transitioning away as a consumer is virtually impossible. Travel, energy supply, even getting groceries, are all carbon-intensive activities that individuals cannot withdraw from.

The fossil fuel industry has been able to achieve this by methodically and gradually incorporating fossil fuels into every societal innovation and development. For example, after World War II, the US found itself with a great excess of oil and gas. To get rid of this excess, corporations started promoting the automobile industry and encouraged family road trips across the country, a now popular and ingrained part of American culture. As explained by Franta, “these high consumption ways of living that were promoted by the industry… [become] very hard for consumers to opt out of.”

“the corporates have largely embraced this notion of individual responsibility because it prevents people from looking at them.”

The fossil fuel industry is even taking over financial systems. Cryptocurrency, a booming form of alternative payment, has a significant carbon footprint. Mining cryptocurrencies like Bitcoin emits significant GHGs and is water and land intensive. Consequently, if an individual were to purchase Bitcoin or another type of cryptocurrency, their carbon footprint would expand to include its environmental impact.

A similar technique was used by the tobacco industry in pushing cigarettes on consumers. While smokers were blamed for their excessive smoking habits, little attention was given to the tobacco industry for creating a highly addictive product. The tobacco industry suppressed data finding nicotine addictive, used predatory marketing techniques, adjusted prices to encourage sales, and even increased the amount of tobacco in cigarettes to maintain consumers’ addictions. They deliberately created an environment where choosing not to smoke got increasingly more difficult. Similarly, consumers are blamed for their excessive carbon footprints, while the fossil fuel industry is intentionally creating a world that cannot function without GHGs.

Jasper Tuelings, Director of Strategic Litigation at the Children’s Investment Fund Foundation, explains that “the corporates have largely embraced this notion of individual responsibility because it prevents people from looking at them.”

Today, cities worldwide account for more than 70% of man-made CO2 emissions. These emissions come from a combination of both corporate and individual actions, including general industry, electricity power plants, commercial and residential buildings, and ground transportation. Many of these sources are considered part of an individual’s footprint, despite the fact that individuals cannot control the energy used to run public transportation, power commercial buildings, and so on.

Even traditional measures taken to reduce one’s carbon footprint are energy intensive. Renewable energy production and delivery emits pollution, is water intensive, and disturbs communities, wildlife, and wildlands. Additionally, a recent study found that a typical electric vehicle must be driven between 28,069 and 68,160 miles before obtaining any emissions benefits, a number which many drivers do not reach before selling or replacing their vehicle. Further, while electric vehicles are cleaner to drive, they are dirtier to build, producing excessive GHG emissions during the manufacturing phase. Thus, while switching to renewables or driving an electric vehicle can be good ways to reduce one’s individual footprint, they do not significantly reduce global emissions.

A 2008 MIT study confirms this conclusion. In this study, researchers found that even those living most the modest lifestyles, including a Buddhist monk, a five-year-old child, and a homeless person, had a higher carbon footprint than the world average. Their average energy use was roughly one third of the average American and double the global average. This study also found that matching these individuals’ energy output was “not obtainable for the average American on a voluntary basis.” So, if living by the most modest means still produces significant emissions, why is the onus on individuals to address climate change by reducing their footprint?

Clearly, the corporate narrative of consumer control puts unrealistic expectations on individuals to lower their carbon footprints. Moreover, putting the onus on individuals to reduce their carbon footprint deepens preexisting social divides and inequalities based on wealth and class, allowing only those within a certain tax bracket to “meaningfully” lower their carbon footprint. Switching to sustainable alternatives, like renewable energy or an electric vehicle, is more difficult and expensive than keeping with business as usual.

Further, those in higher tax brackets often live the most polluting lives. While wealthier people can afford to take alternative, more sustainable measures that may actually significantly reduce their footprint, there is often incentive in engaging in highly polluting activities. In these situations, people will often buy carbon credits to “offset” their polluting behavior instead of changing their conduct. Taylor Swift, for example, emitted roughly 8,300 tons of carbon emissions in 2022 due to her private jet usage, which is 1,800 times the average human’s emissions and 576 times the average American’s. To offset these and other emissions she is responsible for, Swift buys carbon credits. While mitigation measures like carbon credits are not meaningless, they are not as effective as cutting back on emitting activities.

When first introduced to the concept of a carbon footprint, I bought into its narrative of consumer responsibility. I was in high school, assigned to complete a carbon footprint calculator and report back on my personal footprint. Doing so made me feel both empowered and discouraged. By completing the calculator, I was given concrete ways to lessen my impact on the environment. Inconveniently, however, many of the most impactful changes I could make to lower my footprint were out of my control. Significantly reducing my footprint meant convincing my parents to change our house’s energy and heating sources, buy a hybrid or electric car, or switch our appliances to more energy-efficient alternatives – all of which can be expensive and inconvenient. Today, I still face challenges in lowering my footprint. While I can recycle and compost, use less plastic, and eat less meat, these acts do little to lower global GHG emissions. Eloquently put by Tuelings, “current existence at an individual level inevitably comes with emissions.”

Mandy DeRoche, a Deputy Managing Attorney at Earthjustice, has also had a tumultuous relationship with her carbon footprint. 

“I remember when it was a new thing, [I took] it very seriously as an individual [] trying to [have] as lean of a footprint as possible and trying to convince my family to take it as seriously as possible. I’ve become a little less optimistic over time about what change that has, even if I convince everyone in my family and friend circles to be leaner, what impact would that have?”

Exposing the Illusion: The Path Towards Corporate Accountability

The concept of a carbon footprint is here to stay. While we all have a carbon footprint, it’s not as important as corporations make it out to be. At the same time, however, individual actions are not futile. Individual contribution to climate action means conscious consumerism, when possible, as well as pressuring companies, stakeholders, investors, and representatives to hold accountable those with real control and changemaking power. Moving forward, a few promising paths towards achieving corporate responsibility and accountability include government regulation, advocacy and lobbying, and education and awareness.

Government Regulation

Theoretically, one of the most powerful tools in achieving corporate accountability and compliance is government regulation. In 2022, the Securities and Exchange Commission (SEC) proposed rules to enhance and standardize climate-related disclosures for investors. These rules would require publicly listed corporations of a certain size to disclose, inter alia, their governance of climate-related risks and the impact of climate on their business model, finances, and corporate strategy. Further, the proposed rules would require corporations to disclose their direct GHG emissions (known as Scope 1 emissions), indirect emissions (Scope 2), and “GHG emissions from upstream and downstream activities in its value chain” (Scope 3). In effect, the SEC’s rule would require corporations to take account for their carbon footprint, turning the script back on the corporate actors who have evaded responsibility for decades.

Perhaps unsurprisingly, the SEC made substantial adjustments to these requirements after opening the rule for comments and adopted the final rule in March 2024. Most notably, the SEC eliminated the disclosure of Scope 3 emissions, which makes up the greatest number of corporate emissions. Further, corporations must only disclose Scope 1 and 2 emissions to the extent they would be financially “material” to a reasonable investor’s decision making.

A chart of Scope 1, 2, and 3 carbon emissions worldwide from 2017 to 2021. This shows how significant Scope 3 emissions are, given its proportion of total carbon emissions.

Only days after the final climate-disclosure final rule was adopted, the Fifth Circuit granted a request for an administrative stay on the rule, following a lawsuit filed by two oil companies. This means that the applicability and enforcement of final rule is halted until the Fifth Circuit can determine whether it passes muster on a constitutional and statutory basis. The rule has now been challenged in the Second, Fifth, Sixth, Eighth, Eleventh, and D.C. Circuits, although its legal future remains uncertain until a court rules on the validity of the various challenges. These challenges show that corporations are viciously pushing back on government efforts to increase corporate accountability and financial liability. Thus, while the government has attempted to put the onus back on corporations to reduce their carbon footprints, it has been largely unsuccessful.

However, one should not lose all hope for climate-focused corporate regulation. We should look to successful models of corporate regulation and climate accountability around the world when determining where to go next, principle of which is the European Union’s (EU) Corporate Sustainability Due Diligence Directive (CSDDD). The CSDDD, adopted in 2022, has found success in mandating corporate disclosure and alignment of corporate governance with sustainable objectives. 

The CSDDD is enforced through administrative supervision and civil liability, both of which have the power to impose fines, compliance orders, and sanctions onto non-complying corporations. The CSDDD applies not only European companies, but also to non-EU companies that generate a net turnover rate of more than EUR 40 million in the EU (provided at least 50% of worldwide turnover was generated in a high-impact sector) or more than EUR 150 million. This broad net allows the CSDDD to regulate not only European companies, but also foreign companies producing significant emissions in Europe. The CSDDD offers hope for what climate-focused corporate regulation in the US could look like without government capture.

Advocacy and Lobbying

Another path to achieving corporate accountability is through advocacy and lobbying. Activism can be anything from grassroots protesting to applying pressure to companies, shareholders, and investors to make more climate-friendly decisions.

Inside the corporate sphere, investor and shareholder activism has been on the rise. By bringing climate-based resolutions to the table during proxy season, activist shareholders can negotiate corporate climate commitments. Some of these commitments include setting science-based targets to reduce emissions, reporting their climate lobbying, and even expanding net zero GHG commitments to include customers and suppliers of natural gas. In 2023, shareholders brought 256 climate-related proposals, 83 of which were withdrawn after negotiating some type of climate commitment. Looking forward to the 2024 proxy season, investor and shareholder activism remains strong. As of March 26, 263 climate-related proposals were filed by shareholders, with more to be expected, the greatest number filed to date. Many of the climate resolutions are spearheaded by shareholder representatives, including As You Sow and Green Century Fund.

By bringing climate-based resolutions to the table during proxy season, activist shareholders can negotiate corporate climate commitments.

While these are promising developments, investors and shareholders have a more limited role compared to those in the C-suite. As a result, activist shareholders and investors can only do so much when introducing non-binding resolutions during proxy season. Further, while investor and shareholder activism is growing, there are still many investors and shareholders hesitant to apply pressure or vote against board directors. Lastly, corporations making commitments of this sort does not always lead to climate action. While corporations may commit to increasing transparency on emissions reductions, these words are meaningless unless there is action behind them.

Individuals may also push for corporate action by campaigning for fossil fuel divestment. Fossil fuel divestment campaigns have taken over institutions across the world. Divesting from fossil fuels ends the financial relationship between a given entity and the fossil fuel supplier, sending a message that the fossil fuel industry is largely responsible for climate change and must pay for their contributions. Selling off fossil fuel investments, in theory, will reduce the industry’s capital and make it harder for them to operate, eventually leading to their demise. Over 1600 institutions have divested from fossil fuels, including universities like Harvard and Oxford, to government entities like the NYC pension fund and the state of Maine.

While divestment campaigns can be a powerful way for institutions to demonstrate their commitment to sustainability, it may not be the most effective means of demanding corporate compliance. Selling off fossil fuel assets requires someone else to buy it, meaning another party must now invest in fossil fuels. As a result, divestment campaigns can create the opposite result of what they intended – breathing further life into the fossil fuel industry. While divesting from fossil fuel industries can be a successful means of advocacy, achieving real impact requires more complex processes of when and how to withdraw from fossil fuel investments.

A gathering to support fossil fuel divestment.

Education and Awareness

While the success of government regulation and advocacy efforts may fluctuate, individuals can always find empowerment through education and awareness. When asked what can be done to improve corporate accountability, Heede said that he will “continue to publish [his] work,” which educates on fossil fuel producers’ contribution to climate change.

The biggest weakness in the corporation illusion of consumer control is consumers’ knowledge that they can only do so much. It’s clear individual actions alone will not solve the climate crisis. While it is important to lower your individual footprint, it is not within (most) individuals’ power to make the changes necessary to stop climate change. Lowering your carbon footprint is never a bad thing, but as an individual you should be doing it for the right reasons.

Further, even if individuals make substantial changes in their behavior, it may not be enough. Corporations possess the power and control to change the rules individuals play by, such as creating the narrative of carbon footprints. However, nothing is more powerful than knowing these truths and making them known to others, for corporations cannot grow their narrative of consumer responsibility if individuals do not buy into it.