Ethics Case Controversy
On February 12th 2019 seven environmental and human rights organizations in the Netherlands announced that they are prepared to sue Royal Dutch Shell. Shell Oil is a British-Dutch oil and gas company headquartered in the Netherlands. It is one of the six oil and gas "supermajors" and the fifth-largest company in the world measured by revenues. The seven organizations are Greenpeace, ActionAid, Both ENDS, Wadden Sea Forum, Longeron Milieu Actief, Fossilvrij NL, and Friends of the Earth Netherlands/Milieudefensie. The organizations are going to sue Shell Oil if they refuse to change their business model to comply with the Paris Climate Agreement. The groups suing are accusing Shell of "deliberately obstructing" efforts to keep global warming well below 2 degrees Celsius, which violates the Paris Climate Agreement. “The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius” (UNFCC).
|UNFCC Paris Climate Agreement|
|Major Oil Refinery|
thinking about what is best for their company to make the most profit possible. There has been no proof by the activists that Shell is breaking any laws. “Laws therefore restrict what a business is ethically allowed to do to profit” (Salazar, 18). Although the way they do their business may be affecting the environment and making people unhappy, an individualist would do the same thing Shell is doing. As long as Shell continues to follow the law, they do not have to change anything about their business and can continue operations being one of the worlds leading companies in revenues.
Under the utilitarianism theory, the main focus is happiness. “Business actions should aim to maximize the happiness in the long run for all conscious beings that are affected by the business action” (Salazar, 19). Under utilitarianism it is very important to consider the cost and benefits of a certain course of action. When applying utilitarianism to business decisions you have to weigh all possible outcomes and see if it will affect any stakeholders by making them unhappy. From a utilitarian point of view this case would be considered unethical. Shell’s business decisions have affected many stakeholders such as, the activist’s groups, other major oil companies, the human population, and oil refineries. The consequences caused by shell has made all these stakeholders unhappy. The activist groups are currently unhappy because Shell is emitting too much greenhouse gases harming our environment and disobeying the Paris Climate Agreement. “This means that animal testing and the destruction of ecosystems in building, manufacturing, and dumping are all bad outcomes under utilitarianism, and should be avoided unless greater benefit can only be achieved through such losses” (Salazar, 20). Shell is not only harming our environment, but is also harming animals. By emitting these greenhouse gases animals and people are being harmed and it is very dangerous. Shell is also unhappy in this case being they are facing accusations that they believe are not true.
Under virtue theory the main focus is about character and how their actions reflect who they are as a business. “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). The main values of virtue theory are character traits that promote wellness or flourishing of individuals within a society. Virtue focuses on a person’s character and they analyze this based on four main virtues, courage, honesty, self-control, and fairness. A virtue theorist would consider this case to be unethical because Shell failed to reach the four main virtues. Shell showed very little courage so far in this case because they refused to switch their business model because they were afraid of losing profit, so they didn’t want to advance and make the people happy by trying to make a switch. This shows lack of courage because they did not want to risk switching over and possibly losing money. Acting selfish and not flourishing. Shell has also showed a lack of honesty throughout this battle because they continue to argue they are doing nothing wrong and are not affecting anyone, even though it is scientifically proved that they are harming the environment. Shell clearly has no self-control because every chance they get to make money they take advantage of it no matter the consequences it causes. Finally, Shell shows no fairness to anybody but themselves. They are very selfish and show no consideration towards the activists’ groups trying to make this planet a better place.
Justified Ethics Evaluation
In my opinion, Shell Oil acted unprofessional and unethical in this case. All of this could have been avoided if Shell just did the right thing by following the Paris climate agreement and take the right step in their business model by adding some renewable energy. Now that Shell is being accused of this, they are going to have to do something to recover from this. If this case ends up going bad for them it could ruin their entire company and they will fall down the gutter. There are many other big oil companies that are willing to or already have switched to renewable energy, and if Shell does not do this these companies will take over the industry and Shell will slowly become nonexistent. Millions of customers would be willing to switch to a better company and that is Shell’s main problem. Overall, Shell needs to smarten up, stop acting selfish, and a find a way to continue to be as dominant as they are using renewable energy instead of oil.
|Examples of renewable energy sources|
“Our Values.” Shell Global, www.shell.com/about-us/our-values.html.
“Royal Dutch Shell Mission, Vision & Values.” Comparably, www.comparably.com/companies/royal-dutch-shell/mission.
Salazar, Heather. The Business Ethics Case Manual. n.d.
“Shell Faces Lawsuit in the Netherlands, a New Legal Front in Climate Battle.” Climate Liability News, 14 Feb. 2019, www.climateliabilitynews.org/2019/02/12/shell-netherlands-lawsuit- climate-change/.
“What Is the Paris Agreement?” UNFCCC, unfccc.int/process-and-meetings/the-paris- agreement/what-is-the-paris-agreement.