Royal Dutch Shell Group .com Rotating Header Image

Are Shell finally recognising the need to tackle climate change?

28 March 2019

Few people would associate Royal Dutch Shell – oil and gas mega-company and the sixth largest enterprise in the world – with taking a lead in tackling climate change.

However, Shell is making a serious attempt to show it is walking the green walk with commitment and enthusiasm. This week it revealed its utility arm First Utility, acquired a year ago, has rebranded as Shell Energy and switched all of its 700,000 UK residential customers to power generated by renewables.

This follows an announcement that the company has set short-term targets as part of a drive to reduce the net carbon footprint of its energy products. In a particularly radical move, it is planning to link progress on these to the pay packages of its top executives.

The initiative has been given the support of the global investment community and is backed by Climate Action 100+, a grouping led by lead investors who collectively have more than $32 trillion of assets under management.

Those investors include Robeco, headquartered in Rotterdam, the Netherlands and the Church of England Pensions Board. The move has been welcomed by the Archbishop of Canterbury, Justin Welby, and Shell’s Chief Executive Officer, Ben van Beurden, saying that it “seeks to ensure we thrive as the world works to meet the goals of the [2015] Paris Agreement on climate change”.

But the oil and gas industry has a chequered history when it comes to positive action on the environment. According to reports, the largest companies including Chevron, BP and Exxon- Mobil spend nearly $200 million a year lobbying to obstruct, delay or control policies addressing climate change, including a spend of millions on social media.

The global oil price currently remains volatile and prospects for the future are unpredictable.

Despite this, the major companies are massively increasing their investment in production.

Spending this year is expected to be $115 billion, with only some 3% of this dedicated to low carbon projects.

As extraction becomes more challenging and costs rise, so the industry is driving efficiencies and reducing overheads where it can. All this begs the question: can a sector of the economy dedicated to fossil fuels really become an evangelist for renewables, or are we just seeing global scale greenwash?

According to Oil and Gas UK, the Aberdeen-based trade association for the industry, it is inevitable that different companies in different countries will move towards low carbon solutions at different speeds and in different ways.

“They are all in different places when it comes to trying to embrace the consequences of climate change”, says Mike Tholen, the organisation’s Upstream Policy Director. “Different perspectives and aspirations all come into play in this.”

He also believes, however, that the oil and gas companies have become much more engaged with the issue in recent years.

“Like society, they are seeing an increasing imperative to respond. But there has to be balance: society needs energy, and globally, hydrocarbons will still form a huge part of the mix. We can’t simply walk away from that.”

While oil and gas are technically finite – when they run out, we’ll need to find something else, with renewables currently the obvious choice – in practice, developments such as fracking, though they may be controversial, mean fossil fuels are likely to be with us for a good while yet.

Tholen believes, however, that there is a recognition among the big exploration and production companies that climate change is very much on the agenda and cannot be ignored, and that their corporate strategies have to be tailored to suit.

“The drive to follow a low carbon path through to a no-carbon path is one the industry recognises.”

Because of price volatility, he adds, the companies have to plan on the basis of being cost competitive. “That means being clever and doing things more cheaply over time.”

The oil and gas majors are increasingly looking at ways of making their processes less carbon-intensive.

“There is always a challenge on retro-fitting existing assets and some facilities do retire early as they are no longer carbon efficient. But new assets use new technology to reduce the amount of energy used and carbon emitted in producing oil and gas. Those trends are going to continue.”

The switch away from fossil fuels to renewables, then, will take some time. Replacement of one with the other is like turning a huge ship round. In the UK, for instance, renewables output would have to increase eightfold in order to displace the amount of gas currently consumed. This inevitably means that in the UK, we will have a number of sources for our heat and power well into the foreseeable future.

“We will see more energy efficiency, but globally, as we experience more people being moved out of poverty, demand will continue to grow, so the need for a diversified energy mix will continue for decades to come,” says Mike Tholen.

“Using lower carbon sources and finding ways to decarbonise hydrocarbon sources will dominate the agenda. Renewables have a huge part to play in this, and they will share technologies from the oil and gas sector.”

The Herald’s Climate for Change initiative supports efforts being made by the Scottish Government with key organisations and campaign partners. Throughout the year we will provide a forum in The Herald newspaper, online at and in Business HQ magazine, covering news and significant developments in this increasingly crucial area.

If you are interested in contributing editorially or interested in becoming a Climate for Change partner, please contact Stephen McTaggart on 0141 302 6137 or email [email protected]


This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

Comments are closed.