Shell has made a profit of $ 3.6 billion dollars in the second quarter, the company announced today. “Investors now know what Shell’s second quarter looked like, but they still have no idea what Shell’s future will look like,” says Mark van Baal of Follow This.

Energy transition

Investments to engage in the energy transition and comply with the Paris Climate Agreement are not to be found in these figures. “Shell invests almost nothing – less than one percent –in forms of energy other than oil and gas,” says Van Baal (around $200 million of a total of $25 billion).

Investors dissatisfied

At the Shell shareholders’ meeting, many investors complained about the company’s lack of transparency and leadership in the energy transition. PGGM, for example, asked Shell to “formulate concrete goals for CO2 reduction” and made an “urgent appeal to provide insight before the next shareholders’ meeting [May 2018] into the way in which the company is contributing to the energy transition.”

Bid for renewable energy producer

Shell could change its course. Reuters uncovered rumours that Shell is considering purchasing Equis Energy, an Asian producer of renewable energy with an estimated value of $5 billion.

Task Force

Van Baal expects Shell to publish goals for the energy transition, considering Shell’s enthusiastic reception of the final report of the Task Force on Climate-Related Fiancial Disclosures (TCFD, initiated by Mark Carney of the G20 Financial Stability Board (FSB) and Michael Bloomberg). The TCFD advises companies to publish goals for emission reductions. “We look forward to concrete long-term targets that are aligned with the targets of the Paris Climate Agreement, which will require net zero emissions in 2050,” says Van Baal.

“Shell’s second quarter figures are an excellent starting point from which to take leadership in the energy transition,” says Van Baal. “Unfortunately Shell is using those profits to explore for even more oil and gas instead of investing in renewable energy.”

Follow This is a movement of 3.200 green shareholders in Shell that supports Shell to take the lead in energy transition. Follow This does so by gathering shareholders to support the resolution “Shareholders support Shell in taking the lead in energy transition” (complete text via this link).

The green Shell resolution (resolution #21) states in summary: “Shareholders request Shell to set targets aligned with the Paris Climate Agreement.”

4 of the 10 largest Dutch institutional investors (Actiam, MN, Achmea IM and Van Lanschot/Kempen) voted for the resolution. 4 (PGGM, Aegon, NN and Delta Lloyd) urged Shell to take leadership in the energy transition by abstaining from voting. 2 (ABP/APG and Robeco) voted against.