Shell’s successful appeal against a Dutch climate ruling highlights the challenge in tackling emissions produced from the use of petroleum products, also called Scope 3. The major climate ruling from 2021 ordered a 45 per cent reduction in Shell's absolute carbon emissions by 2030 compared to 2019 levels, including both direct and indirect emissions.
On Tuesday, a Dutch court overturned the ruling against Shell, but said that the company has a responsibility to lower greenhouse gas emissions to mitigate climate change. The court noted that Shell was already making progress on its direct emissions targets and sided with the company’s argument that a strict order to reduce Scope 3 emissions could potentially harm the environment by encouraging consumers to switch to more polluting alternatives like coal.
“The main outcome to be looked at is the fact that the Dutch court has revoked or thrown out the issue that a company like Shell should be looking at Scope 3 emissions, as this was part of the former ruling,” said Cyril Widdershoven, an analyst at the think tank Strategy International. Scope 3 emissions should be addressed, but the legal basis for holding a company accountable for emissions from the use of its products remains unclear, Mr Widdershoven told The National.
Emissions from the use of oil products account for 80 per cent to 95 per cent of total carbon emissions from oil and gas companies, but only a small number of firms have set targets to reduce Scope 3 emissions. Unlike Scope 1 and Scope 2 emissions, which can be directly addressed through operational changes and new technologies, Scope 3 emissions present a more complex challenge, as they rely on influencing the behaviour of consumers and other businesses, which is outside of a company's direct control.
“A court ruling would not reduce overall customer demand for products such as petrol and diesel for cars, or for gas to heat and power homes and businesses,” Shell said in a statement on Tuesday. It would “do little” to reduce emissions, as customers would take their business elsewhere, the company added.
Fossil fuels made up 84 per cent of the global energy mix in 2023, according to the latest Statistical Review of World Energy report. Disruptions to natural gas supply – seen as a transitional fuel – can prompt power plants to switch to burning coal, which has roughly double the carbon intensity of gas. Currently, Scope 3 is not directly addressed in any of the main climate charters or agreements.
Many oil and gas companies, including Shell, committed to the Oil and Gas Decarbonisation Charter (OGDC) last year. This charter aims to achieve net-zero emissions by 2050 or earlier, and to reduce methane emissions from exploration and production.
An OGDC spokesperson declined to comment on the case, saying the charter does not address individual member companies. Last week at Adipec, the charter’s head Bjorn Sverdrup said that oil companies tapping the brakes on some climate initiatives would not affect long-term net zero goals.
“There may be short-term adjustments … but I think the long-term direction is set, and it's all a question about pace. I think there is eagerness to speed things up rather than slow things down,” Mr Sverdrup told The National in an interview on the sidelines of the Abu Dhabi event. Oil and gas companies face the challenge of balancing environmental responsibility with profitability, driven by increasing pressure from investors, regulators and consumers.
BlackRock, Shell's largest shareholder, declined to comment on the climate ruling, and Vanguard Group, the second-largest shareholder, did not respond to a request for comment. Despite the growing adoption of electric vehicles and renewable energy, oil and gas are projected to remain essential to the energy landscape in the coming decade, especially as demand rises from developing economies like India.
Opec, the oil producer's group, has urged for increased investment in the oil industry, estimating that $17.4 trillion is necessary to meet growing energy demand through 2050. This figure is higher than the $14 trillion projected by the group last year for the period ending in 2045. Climate activists voiced disappointment with the development, but said the ruling also opened the door for future climate litigation targeting fossil fuel companies based on their investments.
“While we mourn today’s setback, the ruling establishes a responsibility for big oil and gas to act that future litigation can build on. The court ruled that protection against climate change is a human right, and corporations have a responsibility to reduce their emissions," said Laurie van der Burg of Oil Change International. "As far as we know, this is the first case where a court has acknowledged that new investments in oil and gas are incompatible with international climate goals."
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IPL 2018 FINAL
Sunrisers Hyderabad 178-6 (20 ovs)
Chennai Super Kings 181-2 (18.3 ovs)
Chennai win by eight wickets
Brown/Black belt finals
3pm: 49kg female: Mayssa Bastos (BRA) v Thamires Aquino (BRA)
3.07pm: 56kg male: Hiago George (BRA) v Carlos Alberto da Silva (BRA)
3.14pm: 55kg female: Amal Amjahid (BEL) v Bianca Basilio (BRA)
3.21pm: 62kg male: Gabriel de Sousa (BRA) v Joao Miyao (BRA)
3.28pm: 62kg female: Beatriz Mesquita (BRA) v Ffion Davies (GBR)
3.35pm: 69kg male: Isaac Doederlein (BRA) v Paulo Miyao (BRA)
3.42pm: 70kg female: Thamara Silva (BRA) v Alessandra Moss (AUS)
3.49pm: 77kg male: Oliver Lovell (GBR) v Tommy Langarkar (NOR)
3.56pm: 85kg male: Faisal Al Ketbi (UAE) v Rudson Mateus Teles (BRA)
4.03pm: 90kg female: Claire-France Thevenon (FRA) v Gabreili Passanha (BRA)
4.10pm: 94kg male: Adam Wardzinski (POL) v Kaynan Duarte (BRA)
4.17pm: 110kg male: Yahia Mansoor Al Hammadi (UAE) v Joao Rocha (BRA
Schedule:
Pakistan v Sri Lanka:
28 Sep-2 Oct, 1st Test, Abu Dhabi
6-10 Oct, 2nd Test (day-night), Dubai
13 Oct, 1st ODI, Dubai
16 Oct, 2nd ODI, Abu Dhabi
18 Oct, 3rd ODI, Abu Dhabi
20 Oct, 4th ODI, Sharjah
23 Oct, 5th ODI, Sharjah
26 Oct, 1st T20I, Abu Dhabi
27 Oct, 2nd T20I, Abu Dhabi
29 Oct, 3rd T20I, Lahore
Global Fungi Facts
• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The Facility’s Versatility
Between the start of the 2020 IPL on September 20, and the end of the Pakistan Super League this coming Thursday, the Zayed Cricket Stadium has had an unprecedented amount of traffic.
Never before has a ground in this country – or perhaps anywhere in the world – had such a volume of major-match cricket.
And yet scoring has remained high, and Abu Dhabi has seen some classic encounters in every format of the game.
October 18, IPL, Kolkata Knight Riders tied with Sunrisers Hyderabad
The two playoff-chasing sides put on 163 apiece, before Kolkata went on to win the Super Over
January 8, ODI, UAE beat Ireland by six wickets
A century by CP Rizwan underpinned one of UAE’s greatest ever wins, as they chased 270 to win with an over to spare
February 6, T10, Northern Warriors beat Delhi Bulls by eight wickets
The final of the T10 was chiefly memorable for a ferocious over of fast bowling from Fidel Edwards to Nicholas Pooran
March 14, Test, Afghanistan beat Zimbabwe by six wickets
Eleven wickets for Rashid Khan, 1,305 runs scored in five days, and a last session finish
June 17, PSL, Islamabad United beat Peshawar Zalmi by 15 runs
Usman Khawaja scored a hundred as Islamabad posted the highest score ever by a Pakistan team in T20 cricket
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”