Shell’s disrupted AGM was a firm reminder that companies need societal approval to operate
Dr Laurence Wainwright, Smith School of Enterprise and the Environment, University of Oxford
The interruption of Shell’s AGM in London this week by environmental activists – mostly from Extinction Rebellion (ER) – was an attempt to publicly shame Shell into dramatically improving its environmental performance. My research has shown that these tactics – used consistently over several years – can be effective, sometimes resulting in a company fundamentally changing its sustainability strategy - and even their core business activities.
This week, these activists adopted the role of norm entrepreneur, using shame-based public campaigning to challenge and attempt to revoke Shell’s social license to operate. And in doing so, tried to establish new norms of what should constitute legitimacy in terms of environmental performance. While a company may have a legal right to exist and engage in certain behaviours, if societal approval is lacking then it will have a hard time getting by. Concerning corporate use of public natural resources, social licence considers whether an organisation has the on-going acceptance or approval from society to do something – or even to exist.
Shell now finds itself in a precarious position. Tuesday’s incident comes at a time when the company faces mounting pressure, from multiple angles. Unless Shell can − through both its actions and words − convince its stakeholders that it is making genuine efforts to improve its environmental performance, its social licence (in addition to its legal mandate, which is currently being challenged in the courts) may be revoked and its long-term legitimacy and survival put in serious jeopardy.
Whether or not ER is the right organisation to push Shell (or any company) into upping its game is an interesting, and relevant, question. One might even suggest that, perhaps ironically, the social licence and legitimacy of ER itself has been fundamentally damaged as a result of their radical protesting strategies, which often inconvenience and irritate the public. Regardless however, the fact remains that large energy companies like Shell need to drastically change their ways if we are to successfully reconfigure the relationship between business, society and nature into a mode of operating that is realistic about the environmental limits of Planet Earth. And change will only come about if serious pressure is applied. Whether it be done by ER or anyone else, holding companies to account is vital. Our long-term survival as humans – and that of the species we share the planet with – literally depends on it.