Source: Common Wealth
Shell reported profits of $5.1 bn (£3.9 bn) in its Q2 2023
results, while shareholder transfers stood at $6.2 bn (£4.8 bn)
exceeding profits in the past quarter. The oil and gas company
also announced a new share buyback programme of £2.3 bn for the
coming 3 months. Analysis from the think tank Common Wealth adds
to the mounting evidence that despite its green rhetoric Shell is
doubling down on fossil fuels as the climate crisis
intensifies.
Today’s new figures show Shell’s investment in “Renewable and
Energy Solutions” pales relative to its investment in fossil
fuels and what it pays out to its shareholders. In Q2, Common
Wealth analyst Sophie Flinders found Shell spent 5.6 times as
much on fossil fuels on investments in its “Renewable and Energy
Solutions Division”.
By Shell's own definition, this “Renewable” division also
includes “the marketing and trading and optimalisation of power
and pipeline gas”, as well as clean energy.
The analysis also finds that Shell’s CEO has seen their pay rise
between 2021 and 2022 by 53%, from £6.3 million to £9.7
million.
Alongside Shell, Centrica, the company that owns British Gas, has
today posted its results. For the first six months of 2023, the
company posted historic profits of £2.1bn (compared to
£1.3bn for the first half of 2022). British Gas itself has
made a record profit of £969m for the first six months of
2023.
Investment in new fossil fuel projects go against the
recommendations of key global organisations like the
International Energy Agency, who argue any new oil and gas
development would be incompatible with climate goals. However,
domestic policy on this issue continues to lag, with commitments
from the UK government to issue 100 new licenses.
The surge in energy profits and shareholder payouts raises
critical questions about the structure and role of the for-profit
corporation, with the oil and gas sector failing to deliver a
meaningful or effective transition to clean and secure
energy.
Mathew Lawrence, Director at Common Wealth,
said:
Shell remains a cash machine for its shareholders at the
expense of people and planet. But this is more than just a story
of ‘greedy corporations’. It underscores there is a fatal tension
between the shareholder-owned and profit maximising corporation,
and the needs of the climate and society at large. The need to
maximise returns for investors above other priorities hinders
decarbonisation, and has left us dependent on volatile and
expensive oil and gas – driving the twin crises of climate and
the cost of living.
Sophie Flinders, Data Analyst at Common Wealth,
said:
Shell’s payouts of $2.6 bn in dividends and $3.6 in share
buybacks exceed even the company’s profits this quarter, with
shareholders receiving bigger sums than the oil giant’s own
earnings this quarter. In 2022, their CEO made £9.7m, up 53%
from 2021.
In short, there’s too much money to be made in fossil fuels
to place the responsibility of decarbonising energy on oil giants
like Shell. These windfall profits have not translated into
higher investment in Shell’s renewables. Deadly heat waves in
America, wildfires across the Mediterranean and floods in the
Philippines and Pakistan show that the crisis is already upon us
— and that oil giants need to be consigned to the dustbin of
history. Shareholders are lining their pockets at the cost of a
habitable climate. Clear, ambitious political interventions are
needed to decarbonise energy and avert the worst of the climate
crisis.
Notes:
Common Wealth is a think tank that designs ownership models for a
democratic and sustainable economy. Working at all levels from
community and grassroots groups to national and international
policymakers, we combine rigorous analysis and research with bold
ideas for a society that works for everyone.