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Code red for humanity?

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Shell and BP: why we’re hopeful for a sensible transition to renewables

Sue Noffke: Monday 6 September 2021 9:13 am

The devastating effects of unchecked global warming were laid bare by this week’s landmark report from the Intergovernmental Panel on Climate Change (IPCC).

UN secretary-general António Guterres described the report’s findings as “a code red for humanity”.

The world’s major energy companies were already on the front line of the climate change battle, but following this week’s report public scrutiny of the industry can only intensify.

Fortunately for investors in UK-quoted BP and Royal Dutch Shell, their management teams are rising to the challenge. They are adapting rather than denying.

We had further evidence of the shift in attitudes when Shell’s CEO took to LinkedIn in June to announce an acceleration in the company’s transition strategy. This pledge followed a Dutch court ruling which effectively said Shell should move faster with GHG emission reduction targets globally.

FULL ARTICLE

Related extracts from:

Q&A: the end of big oil?

The oil industry last week faced a “paradigm shift” after climate activists and asset managers led revolts at the annual general meeting (AGM) of the US companies ExxonMobil and Chevron.

Meanwhile, in Europe the Anglo-Dutch oil major Shell lost a landmark court case that will force it to cut its carbon emissions.

What happened with Shell?

More broadly, European companies are perceived to be changing faster than their US rivals. However, Shell also faced a wake-up call last week. In a case brought by Friends of the Earth, a Dutch court ordered the company to reduce its carbon emissions by 45% by 2030 from 2019 levels.

Shell recently set a target to cut the carbon intensity of its products by at least 6% by 2023, by 20% by 2030, by 45% by 2035 and by 100% by 2050 from 2016 levels, “one of the sector’s most ambitious climate strategies,” according to Reuters.

But the court said that Shell’s climate policy was “not concrete and is full of conditions…that’s not enough”.

Shell said that it would appeal the court verdict and that it has set out its plan to become a net-zero emissions energy company by 2050.

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