2 years on it time to escalate BP & Shell engagement: ShareAction
“Shareholders in Shell and BP continue to face significant financial risk as both companies fail to comprehensively adapt their business models to succeed through the low-carbon transition’ according to two new reports by ShareAction of action since the Aiming for A resolutions (press note, BP report, Shell report).
ShareAction say ‘it is now prudent for investors to escalate engagement with BP and Shell to request clear planning around a time-bound <2°C transition strategy. … This strategy would require milestones for implementation and a shift away from high risk and high carbon assets. Such action would signal a meaningful commitment by the companies to make progress towards a low carbon business model, and safeguard capital under disruptive low carbon scenarios.”’ (Institutional Investor, 25 Oct)
‘Both companies responses to the climate change and energy transition threat since then have been “cautious and unconvincing”, say Business Green (26 Oct). The Observer note that ‘their capital spending on low-carbon energy sources (1.3% at BP and 3% by 2020 for Shell) was unconvincing’ (29 Oct).
The Independent report the companies are ‘planning for global temperatures to rise as much as 5°C by the middle of the century’ (27 Oct), and quote ShareAction’s Michael Chaitow saying “Shell and BP want to have their oil and drink it too, by advocating for the landmark Paris Agreement to limit global temperature rises to below 2°C degrees, while planning for scenarios that would violate it.”
- Meanwhile, Bloomberg report ‘Oil majors more than doubled the number of acquisitions, project investments and venture capital stakes, to 44 in 2016 from 21 the year before… In the last 15 years, they’ve completed 428 transactions and spent $6.2 billion building stakes in clean energy companies.’ … ‘To be sure, the sums expended on clean energy still represent a fraction of the money invested in crude every year, showing that the oil majors are still very much focused on their core business. (Big Oil Is Investing Billions to Gain a Foothold in Clean Energy, 24 Oct). Axios look at Statoil, saying ‘One of the world’s largest oil companies, Norway-based Statoil, is teaching thousands of its employees how to talk about climate change and investing billion of dollars into renewable energy. It also doesn’t want to be called an oil company at all.’ (Axios, 2 Oct)
- The Oil & Gas Climate Initiatve announced its first three investments (Press Note, 27 Oct), and ‘that Brazil’s Petrobras (PETR4.SA) and Abu Dhabi National Oil Co (ADNOC) were among those interested’ in joining (Reuters, 27 Oct). In Business Green, Michael Holder examines the group (The OGCI: Oil industry gamechanger or pro-gas greenwash?, 30 Oct)
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