Shell Oil Possibly Facing Legal Action from Environmental (2019- present) By: Nick Parchinski

The Case in Review

Shell Oil's logo

This case controversy is about Shell Oil, a ginormous oil and gas company, possibly facing legal action from seven environmental groups in the Netherlands.  This controversy started in February 2019 when Friends of the Earth, Greenpeace, ActionAid, and four other environmental groups joined forces when they threatened Shell with a court summons on April 5th 2019 f Shell does not meet their demands.  One of their claims is that Shell is currently “deliberately obstructing efforts to keep global warming well below 2 degrees Celsius, which is the biggest goal of the Paris agreement.”(Kottasova, 1) The Paris Agreement is an agreement with the United Nations Framework Convention on Climate Change (UNFCCC) dealing with greenhouse gas emissions.  Most Major Governments have signed this treaty and take it seriously. 

Greenhouse effect diagram

     
Shell put out a statement defending themselves saying "We strongly support the Paris Agreement and the need for society to transition to a lower carbon future.  We’re committed to playing our part and have set an ambition to reduce Shell’s net carbon footprint, including emissions both our own operations and from our customers’ use of our energy products” (Drugmand, 1) The biggest problem with fossil fuels is that they release greenhouse gases which then traps heat which raises the planet's temperature.  This is dangerous to humans, animals, and the Earth.  Greenhouse gases are starting to melt polar ice which raises the sea level and destroys natural habitats.  

Stakeholders

Erich Pica, president of Friends of the Earth

The main stakeholders in this case are Shell Oil, and their CEO, Ben, van Beurden because they may be facing a lawsuit, the environmental groups and their leaders such as Erich Pica, president of Friends of the Earth, Annie Leonard, president of Greenpeace, and Adriano Campolina, CEO of ActionAid because they are the ones demanding change.  Other main stakeholders are animals, human population, and other oil and gas companies.  Humans and animals have to deal with he damage shell has been causing and other oil companies are affected because they may have to change as well

Individualism

Most people would agree that Shell is wrong in this case.  But under Individualism, they are actually doing nothing wrong.  The main focus of individualism is to maximize profits for the shareholders as long as they are doing it legally.  “Business actions should maximize profits for the owners of a business, but do so within the law.”(Salazar 14) A few more main points of individualism is egoism/selfishness and wealth, and pursuing your own interest without anyone make other people's choices.  So as you can see, making money legally is the only thing that matters.  Although Shell has been destroying the planet slowly, they are ethically correct under individualism because they are not doing anything illegal or breaking the law.  Individualism isn't about cutting corners and making money illegally.  Even though their way of business is frowned upon, and individualist would do the same thing because they are making huge profits off of this.
                       

Utilitarianism

Polar bear on melting ice

Under Utilitarianism, the main characteristic of this ethical view is happiness.  Happiness for all living things that can feel pain and pleasure in the short and long term is the biggest concern and main focus point for a utilitarian.  The reason behind this is because “if happiness is valuable, there is no difference morally-speaking between my happiness and yours.”(Salazar, Heather. “Individualism and Utilitarianism”) When looking at this case, the happiness of the stakeholders has been harmed.  The environmental groups have all been harmed because Shell Oil continues to disobey the Paris Agreement and damage the Earth.  The main foundation of their organizations is protecting the environment and reducing greenhouse gases, so they are currently unhappy.  Animals are living things that can feel pain and pleasure.  A specific example of how they are unhappy and being harmed is that their habitats are getting destroyed by the Earth's temperature rising.  Other oil companies that operate similarly are unhappy too because they see Shell facing these accusations and they do not want to have to deal with this so they are most likely going to have to change to different sources for production.  Finally, the human population has been harmed and many are unhappy because these gases are harmful to us as humans and to the planet we live on.  Under Utilitarianism, this would be ruled unethical.

Kantianism

Imannuel Kant

A classic Kant practices rational decision-making, autonomy of individuals, honesty, and freedom. (Salazar, 20) The main idea behind Kantianism is to do the right thing and be honest at all times.  You should never want to deceive another human being because leading them in the wrong direction could cause them great harm down the road “In Kant’s terms, a good will is a will whose decisions are wholly determined by moral demands or, as he often refers to this, by the Moral Law.” (Johnson and Crueton, 5) Before every decision, one should ask themselves if they are being honest and acting in good will with good motivation behind it. Good will indicates that people “have good intentions and use good reasoning to come to conclusions that will make their good intentions effective.” (Salazar, 21) Shell isn’t being dishonest with anybody, but they are not making decisions in everyone’s best interest. They are treating our planet as a means, which means “something valuable in itself, for its own sake. This means they are violating the formula of humanity by acting in their own best interest even though they are destroying our planet slowly over time.  Based off that decision, they are clearing not acting rational or practicing good will. Under Kantianism, this would be ruled unethical because they are not acting rationally, they are not practicing good will, and using the Earth as an ends rather than a means for their own sake.

Virtue Theory
Virtue theory focuses mainly on the character of a person or organization. “Act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits.” (Salazar, 22) Virtue theorists don’t really care about the outcome, they worry about the approach you made to make a decision, the path you to took. The actions you made should leave a positive reflection and portray good characteristics. They can decide if someone is virtuous or not by analyzing the four main virtues, which are courage, honesty, temperance, and justice. Shell oil violated justice because they are not being fair to the rest of the world by releasing greenhouse gases. Greenhouse gases have proven over time that they are dangerous to our environment and public health. Moving onto honesty, Shell isn’t hiding anything.  Everyone knows that they use fossil fuels to produce oil.  I don’t think they violated this virtue but it still isn’t right.  When talking about temperance you are looking at self-control.  Throughout this case, Shell has showed a lot of self-control with facing these accusations. They could easily lash out against these environmental groups but instead they keep it professional.  Lastly, when talking about courage, Shell isn’t acting courageous because they can set an example of how to operate efficiently and make a profit while still showing they care about the planet.  As of now, they have not done this because they still use fossil fuels that damage the Earth.  A virtue theorist would see this unethical because they show poor character in decision making and violate at least two of four main virtues.  

Justified Ethics Evaluation

Paris Agreement

My view on this case is that Shell is acting unethically and not acting as a leader in their industry should be.  Shell Oil is one of the biggest oil industries in the world and they could set an example of using renewable energy and safer ways of production.  I also think that disobeying the Paris Agreement is completely unprofessional because the agreement was put together to try and save natural features in the Earth that cannot be replaced.   I stand with the environmental groups on demanding Shell to change for the sake of our health and the Earth.

Company Action Plan

Shell Oil is currently facing many accusations of harming the planet and disobeying the Paris Agreement.  They are being accused of deliberately obstructing efforts to keep global warming well below 2 degrees Celsius, which is the biggest goal of the Paris agreement.   If they do not meet their demands, they will be summoned to court in early April.  The first thing they need to do is fire the CEO and hire a new one.  The hiring process should be very thorough including background checks and social media checks.  Next, we need to make sure that he is willing to be ethical in the workplace and align with the company's new core values.  These core values include dedication, loyalty, respect, and innovation.  The next step will be to hire new employees.  These interviews will also be very thorough and follow the same lines as the CEO interview.  They need to fit the values and work diligently.  Overall, Shell needs a leader that will set an example for the company itself and all the other companies to switch over to renewable energy. 

Wind energy by windmills

The next step will be to introduce our new way of business. The new CEO will introduce to the company and the world that they are going to start implementing renewable energy and protecting our planet as the start of building back their reputation. Shell is going to move to renewable resources such as Solar energy and Wind energy. First, they will invest into a numerous amount of windmills and solar panel systems across their factories and refineries instead of using coal and gas. This will take away the greenhouse gas emission and reduce global warming drastically. Next, Shell will design a new company logo that has a shell with the sun and windmills to really embrace going green. We will then promote our oil and gas products as climate friendly products instead of using fossil fuels which will also boost our marketing. After production has begun with the new sources of renewable energy, Shell will donate to charities for polar bears such as “Save Our Sea Ice Campaign” and environmental groups to show that they have taken the next step into saving our planet. This doesn’t erase the mistakes Shell has made in the past, but it certainly shows that we are fully bought into going green.

- N. Parchinski

References

“Climate Groups Threaten Lawsuit to Force Shell to Ditch Oil.” Royal Dutch Shell Group .Com, 12 Feb. 2019, royaldutchshellgroup.com/2019/02/12/climate-groups-threaten-lawsuit-to-force-shell-to-ditch-oil/.

Kottasová, Ivana. “Climate Groups Threaten Lawsuit to Force Shell to Ditch Oil.” CNN, Cable News Network, 12 Feb. 2019, www.cnn.com/2019/02/12/business/climate-change-shell-oil/index.html.

“Netherlands: Friends of the Earth to File Lawsuit against Shell If Co. Fails to Address Its Climate Change Impacts.” Business & Human Rights Resource Centre, 4 Apr. 2018, www.business-humanrights.org/en/netherlands-friends-of-the-earth-to-file-lawsuit-against-shell-if-co-fails-to-comply-with-global-climate-targets.

Watts, Jonathan. “Shell Threatened with Legal Action over Climate Change Contributions.” The Guardian, Guardian News and Media, 4 Apr. 2018, www.theguardian.com/environment/2018/apr/04/friends-of-the-earth-threatens-to-sue-shell-over-climate-change-contributions.

National Geographic Society. “Greenhouse Effect.” National Geographic Society, 9 Oct. 2012, www.nationalgeographic.org/encyclopedia/greenhouse-effect/.

  
Salazar, Heather. The Business Ethics Case Manual. n.d.