The dissemination of the “Shell sentence” and compliance with the Paris Agreement

Abstract

The extension of Shell’s landmark sentence to all the foreign affiliates of multinational enterprises (MNEs) would imply a global emissions reduction of 2.76 GtCO2. Between 28% and 43% of the total 2030 emissions reduction target of not exceeding 2°C would be achieved. While 91% of multinational affiliates’ output belongs to high-income countries, 54% of their emissions occur in low- and middle-income countries. Therefore, these commitments could crucially help emerging countries meet their mitigation targets. We place a special focus on MNEs in the vehicle industry and find that the current targets disclosed in the sustainability reports of the leading automotive MNEs (such as Volkswagen, Toyota, Nissan, and Ford) ignore the upstream emissions of their production, as they consider only scopes 1 and 2. This biased approach would have them reducing only 8%-22% of the required reductions of their upstream emissions if the Shell sentence were to be extended to the automotive industry.