• ECHO Action Editor

Shifting Positions: Shell to go transparent on climate?

"Sharing information on the potential business impact of climate change is the right thing to do... not just for Shell, but for companies across all sectors.

Do you look before you leap? Are you better safe than sorry? Is forewarned, forearmed?

I think I know your answers, but is there any reason why the same careful approach shouldn't apply when it comes to climate change?

After all, it is one of the biggest, long-term risks to the global economy.

It is vital to understand the changes and challenges that global warming will bring to our lives, and the huge transition needed if the world is to move to a low-carbon system at the same time as providing energy to a growing population.

The Task Force for Climate-Related Financial Disclosures, convened by Mark Carney, the Governor of the Bank of England, and led by former New York Mayor Michael Bloomberg, is trying to improve that understanding. It has just announced its final recommendations.

The group is a global, collaborative, inclusive attempt to get companies across all sectors to assess more clearly and disclose more transparently both the risks and the opportunities that the energy transition presents. It was born of the G20 and it needs continued backing if it is to deliver on its potential to reshape business for the better.

The intent is to spread more information to advance understanding of companies in the context of climate change. The hope is to guard against a major financial correction caused by an information gap, as witnessed in the banking sector in 2008.

As CEO of Shell, I not only applaud this aim but I have signed a letter confirming our support for the initiative. The details matter and I look forward to Shell working with the task force on those details.

Specifically, how we present forward-looking information in an uncertain world, the disclosure of commercially-sensitive data and the feasibility of providing the suggested detail to the standard required of financial filings.

Ultimately, however, both Shell and the task force want this plan to be fit for purpose.


We agree that companies should be clear about how they plan to be resilient in the face of climate change and energy transition. It is right that it should be transparent which companies are truly on firm foundations over the long-term.

Assessing risks and opportunities is something I already devote a significant part of my own time to. It is something the company has been open about, through publications like last year's portfolio resilience report and our sustainability report, which is now in its 20th year.

We believe that, if the world is to restrict global warming to under 2C, the energy transition must accelerate.

This means much more solar, much more wind, electric cars, hydrogen cars, biofuels, smart meters and levels of energy efficiency which are a long way away from where we are today. It means a massive switch to electricity consumption, which accounts for less than 20% of the energy system today, to take advantage of the growth of renewable power generation.

It means storing away or offsetting the emissions we cannot stop. Ultimately it means getting to a place where the world has stopped adding to the stock of greenhouse gases in the atmosphere.

In short, it means a lot of change.

Time to change

And yes, all this change will, over time, have an increasing impact on an oil and gas company like Shell, because we must also change.

You can already see that change in the company's investments in natural gas, which produces half the CO2 of coal when burnt for power. You can see it in our New Energies business, in which we expect to be investing up to $1 billion a year within three years. You can see it in the fact that company bonuses are now partly determined by how we manage our greenhouse gas emissions. The company's whole strategy is built around resilience throughout the energy transition.

Our work has also led us to believe that there are at least as many opportunities as risks in this transition: in sustainable biofuels, in hydrogen and petrochemicals to name just a few.


Shell knows its future depends on a strategy that works and is resilient for the long-term. Our experience has been that, the deeper our knowledge of the risks and opportunities before us, the clearer our perspective on the future and this feeds in to our strategy. This has helped us understand what the company needs to do to succeed through the energy transition.

This experience is why Shell is backing the task force's efforts to improve knowledge and transparency.

Ignorance is not bliss.

It is a threat to a bright future - and to a healthy planet - for all of us."



© 2020 ECHO Action: #FossilFree603  • •

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