This past week, the oil and gas industry made the news, but not in a way they would prefer.

Royal Dutch Shell has been ordered by the court in the Netherlands to reduce its greenhouse emissions by 45% by 2030, based on 2019 levels. Although Shell already has committed to becoming a net-zero emissions business by 2050, the Dutch District Court in the Hague ruled that this was not enough to be in compliance with the Paris Accord. Although Shell will likely appeal, the judge ordered that the more strict regulations will be in effect during that process.

Investors attending a Chevron shareholder’s meeting voted to demand a reduction in the company’s contribution to climate change. The specifics still need to be hammered out, but a reduction in Scope 3 emissions, which are largely produced by combustion of oil and gas by the users, means leaving reserves in the ground and divesting assets that produce oil and gas for sale.

A shareholder revolt at Exxon Mobile was seen as a rebuke to the company’s management. The small hedge fund, Engine No. 1, placed three new directors to the board with the hope that they will help prepare the company for a world that doesn’t burn fossil fuel.

The dramatic change is partly a result of the science. There is scientific consensus that burning oil and gas is driving climate change. In addition, countries are committing to cutting greenhouse emissions and offering incentives for green energy along with penalties for pollution.

Investors are backing renewable sources of energy, and with the prices for solar and wind energy continuing to fall, and battery storage becoming a feasible way to store energy to deliver it when it is needed, they are following the money. The large pension funds that backed Engine No. 1 at the Exxon shareholders meeting don’t want to be left holding oil stocks while the world is transitioning to renewable power.

The CEO of Royal Dutch Shell, Ben van Beurden, is pushing back against their critics. According to van Beurden, the company is serious about shifting to a more sustainable, renewable future. He indicates that the plan Shell put forth is ambitious, but oil companies are seen as climate deniers and resistant to change. He also indicates that in order to reach the goals of the Paris Accord, the big companies will have to have a seat at the table. Start-ups won’t have the wealth or experience to create worldwide change to power the transition.

Forcing oil companies to reduce emissions may not reduce global emissions. As long as there is demand for oil and gas, someone will produce and sell it. If that production moves to other areas of the world, we may be at risk for supply chain issues, and the companies that buy the divested assets may be less transparent or concerned about reducing emissions. Demand for oil needs to drop before supply can be stopped.