In an interview with The Washington Post five years ago, Shell CEO Ben van Beurden stated, “We believe that climate change is real.” We believe that climate change is a real threat. And we believe that immediate action is required.”
“It doesn’t mean we have to say goodbye to hydrocarbons,” he added. We can’t, in fact. But it does imply that we must make more informed decisions.”
Today, however, Shell and other oil companies are facing criticism from those who do not believe industry leaders are making sound decisions. This week, dissident shareholders attempted to use annual meetings to press their cases. At Shell’s annual meeting in London on Tuesday, dozens of climate activists wearing “Christian Climate Action” T-shirts rhythmically chanted “we will, we will stop you,” forcing the company’s chairman to call a halt to the proceedings for more than an hour.
The disagreement over the purpose of large oil and gas companies is at the heart of the issue. Should they conduct additional research to meet demand for their products, particularly from the world’s poorer nations? Or, in order to meet climate change targets, should they shift to developing renewable energy projects while closing down their traditional businesses?
“Pressure is mounting at the front lines of climate justice,” said Caroline Dennett, a Bristol, England-based safety expert on contract with Shell who resigned in protest of the company’s climate policies earlier this week. She accused Shell of “double talk” and of expanding its oil and gas operations “despite clear warnings from scientists” on her LinkedIn page and in a note sent to 1,400 Shell employees.
“Shell is fully aware that their ongoing oil and gas extraction and expansion projects are causing extreme harms, to our climate, environment, nature, and people,” wrote Dennett, who was hired to assist Shell in avoiding the mistakes made by BP that resulted in a massive Gulf of Mexico oil spill. “I can no longer work for a company that dismisses all warnings about climate change and ecological collapse.”
Shell’s CEO, Ben van Beurden, recently appeared on “The Trouble with Jon Stewart” to argue that shareholder resolutions at this week’s annual meeting demonstrated that “the overwhelming majority of shareholders continue to support Shell” and that the company was “on the right track.”
However, the message was ambiguous in London. Shell’s climate plan has lost ten percentage points of support, falling to just under 80 percent. However, support for a resolution introduced by Follow This, a climate group critical of Shell, dropped to just 20.3 percent of votes cast, down from around 30 percent last year.
“The Company has set ambitious targets in line with the Paris Agreement’s 1.5°C goal,” Shell said in its response, urging shareholders to vote no on the Follow This resolution. “Its strategy promotes a smooth transition, one that keeps oil and gas supplies where they are needed while hastening the transition to low- and zero-carbon energy.”
One sign that oil companies are losing the battles over substance and image is a new set of recruiting challenges.
The Environmental Defense Fund’s senior vice president for energy, Mark Brownstein, said he has spoken with CEOs of energy companies who “are concerned that continuing business as usual isn’t viable in the competition for today’s talent.” Many of the renewable energy companies are smaller, more innovative, and more adaptable than the oil behemoths.
Brownstein, who left a large New Jersey utility to join the environmental group years ago, said that two people had left Shell to pursue similar paths: Andrew Baxter, who was the lead author on a recent EDF report, and Shareen Yawanarajah, who leads EDF’s energy transition efforts in Southeast Asia.
The conflict in Ukraine has sent mixed signals to oil and gas companies. International sanctions against Russia have tightened oil and gas markets, driving up prices and jeopardizing energy supply security. However, governments are also attempting to speed up the installation of renewable energy projects such as solar and wind.