May 26, 2021 was a bad day to be in the oil and gas business.
At Exxon-Mobil’s annual meeting, shareholders demanding that the company move away from fossil fuels and expand into clean energy shook up the company’s board of directors by electing three of their own to new board seats. Over at Chevron’s annual meeting, which was occurring at the exact same time, a shareholder resolution to force the 142-year-old petroleum company to cut its carbon emissions by shifting to cleaner energy overwhelmingly passed with more than 60 percent of shareholders voting in favor of it. Meanwhile, a court in The Hague ruled in favor of environmentalists and others that Royal Dutch Shell was on the verge of breaching its corporate obligations to reduce carbon emissions. In a first case of its kind, the court ordered the oil giant to reduce emissions by 45 percent by 2030 compared to 2019 levels.
On its surface, the stunning same-day trifecta for climate activists would seem to be just the latest sign of the growing pressure by environmentalists to force companies into action on climate change. And that’s how many media outlets characterized it.
But the truth is, the developments were as much about economics as they were about climate activism. Shareholders backing the Exxon-Mobil revolt weren’t just well-to-do tree huggers or young millennials making a stand for their future. They also included Vanguard, the largest mutual fund company with $7 trillion in assets built on the retirement accounts of American workers; State Street, the stoic financial firm that operates the second-oldest bank in the country and BlackRock, the world’s biggest asset manager. At Chevron, unhappy shareholders cited the need to “protect our assets against devastating climate change,” pointing out in their proxy proposal that climate risks “are a source of financial risks.” The Dutch court in its ruling against Shell noted prominently that climate change will “impact the ecology, but also the economy,” citing specifically the loss of biodiversity and the impacts on two cornerstones of the Netherlands’ economy, fisheries and agriculture.
The oil companies learned that day that something had changed. They learned what the rest of the world is learning: That climate change is no longer just an Inconvenient Truth, like we discovered in the 2000s. It’s no longer just a social issue to be protested in the streets like activists around the world did in the 2010s. In the 2020s, climate change is an economic issue. And that changes everything.
The economics of climate change - climatenomics - is now rattling the foundation of our economy at its very core. It’s disrupting centuries-old industries from petroleum to automobiles to utilities and finance. It’s creating new opportunities for investors and entrepreneurs. And it’s sucking money out of the pockets of every American with every wildfire, hurricane, flood and drought made worse by climate change. Perhaps most importantly, now that money and jobs are involved, climatenomics is finally forcing politicians to pass policies that will forever transform our businesses, our lives and our future.

And with a little luck, it might just save our planet.