PRESS RELEASE
IEA predicts oil and gas demand will decline after 2029, but Shell heavily invests in fossil fuels, risking stranded assets
Shell’s investment in its Renewables and Energy Solutions (RES) division were $2.5 billion in 2024 (12%), as published in the company’s annual results released today (page 20, 3rd line from the bottom). Nearly all investments remain tied to fossil fuels that risk becoming stranded assets.
“The board is endangering Shell’s future by ignoring the energy transition and continuing investing in potential stranded assets,” responds Mark van Baal, founder of activist shareholder group Follow This. The International Energy Agency (IEA) forecasts a decline in oil and gas demand after 2029 (graph below).
Stubborn disregard of market forces
“Even shareholders who don’t care about climate risk and only care about the value of their shares in Shell, should be worried about Shell’s stubborn disregard of market forces such as the exponential growth of renewable energy and electric vehicles.”
“Shell risks a dramatic decline in share value as the market adjusts to the realities of disruptive innovation, stranded assets and climate liabilities. Sooner or later oil companies will be held liable for the costs for climate damage.”
Carbon lock-in
“Fossil fuel growth delays the transition and increases the risk of a carbon lock-in, which will make it harder to pivot to renewables each year.”
“Moreover, Shell’s investments in fossil fuels are in conflict with the Paris Climate Agreement that requires almost halving emissions by 2030.”
Investors hold the key
“Investors who are committed to Paris must change the mind of the board of Shell, one of the highest emitters. Big Oil can make or break the Paris Accord.”
Shell could lead
“The handsome carbon-based business model will be over as soon as fossil fuel companies must pay for climate damage. Instead, Shell should use the current profits to explore new business models instead of more oil and gas. Shell could lead and thrive in the energy transition.”
Lack of imagination
“Shell’s attitude shows a lack of imagination beyond oil and gas, and failure to understand the concepts of disruptive innovation and stranded assets,” says Van Baal. According to financial thinktank Carbon Tracker, two thirds of fossil fuel reserves must remain in the ground to tackle the climate crisis.
