Shell Accused of ‘Orwellian Doublethink’ in Downplaying Climate Risks to Investors
Oil giant Shell is back in the firing line this week as it is accused of “Orwellian doublethink” in its attitude to climate change and of failing to adequately addressing the "carbon bubble" and its threat to the company’s profits and shareholders.
The carbon bubble concept is based on the idea that more than two-thirds of fossil fuels must be left in the ground to avoid dangerous climate change and how tighter emissions legislation and emerging clean technologies could result in stranded fossil fuels assets.
Earlier this year, Shell dismissed a report from the Carbon Tracker Initiative (CTI)—the NGO that pioneered the carbon bubble hypothesis—labeling the concept as “alarmist.”
The analysis, released in May, warned oil companies they are poised to water $1.1 trillion of investors’ money through to 2025 on expensive and uneconomic projects which will never see a return in the carbon constrained world.
This week, CTI hit back, accusing the company of failing to comprehensively explain the risks involved, and of misquoting parts of the Intergovernmental Panel on Climate Change’s latest report.
Anthony Hobley, CEO of CTI said:
With this combative stance, Shell has missed an opportunity to explain to its shareholders how its capital expenditure plans are resilient to the impending energy transition.
Acknowledging the seriousness of the climate challenge whilst at the same time asserting no effective action be taken until the end of the century is as classic a case of Orwellian doublethink as you are likely to find.
The organization points out that while acknowledging the need for urgent climate action, Shell’s reassurances to shareholders is based on the assumption that governments will fail to deliver such action.
CTI is accusing Shell of misrepresenting the latest warning from the IPCC, citing the reports claim that “there is a high degree of confidence that global warming will exceed two degrees Celsius by the end of the twenty-first century” but failing to put this into the context of other possible outcomes detailed in the reports series of scenarios.
In a detailed rebuttal of Shell’s argument, CTI said the company had selectively focused on its proven reserves, and failed to acknowledge its growing portfolio of unconventional deep-water projects, which involve higher capital costs, longer lead times and longer payback periods.
Over the next 10 year, the CTI says Shell could invest $77 billion in high cost, high-risk projects, which would need a $95 a barrel oil price to pay off. It is these projects, which are most at risk from becoming stranded, argue CTI.
But it appears that Shell is not the only fossil fuel company wilfully ignoring the risk of climate change to their operations.
An analysis from UK based Carbon Brief, identified a trend of companies acknowledging climate risk, while at the same time failing to acknowledge the threat that climate action could place on their business models.
Of 76 oil, gas and coal companies, only seven responding to the survey, of which six came from major oil companies on the Fortune 500 list.
BP, Shell, ExxonMobil, ConocoPhillips, Statoil and MOL all said climate change as real and that climate policy posed a risk to their business—to an extent—as well as agreeing that regulations to curb emissions should be more stringent over time. Yet no company asked saw climate action as a threat to their business in the coming decades.
Mounting Pressure Against Shell and Friends
CTI’s analysis is not the only source of pressure being placed on Shell this week. It comes as Greenpeace is mounting a growing campaign for toy manufacturer Lego to break ties with the oil major.
The group argues that Lego is contradicting its own efforts to be environmentally sustainable—investing in wind power and taking steps to reduce the impact of its plastic blocks—but continuing to advertising with Shell and allowing the companies branding on its toys.
A new video highlighting the campaign went viral this week, receiving more than 1 million views in just 24 hours.
It shows an Arctic scene made of Lego being destroyed by an oil spill—highlighting Shell’s continued pursuit of oil in the fragile environment.
To save the planet, we must save the Amazon rainforest. To save the rainforest, we must save its indigenous peoples. And to do that, we must demarcate their land.
A new EarthxTV film special calls for the protection of the Amazon rainforest and the indigenous people that call it home. EarthxTV.org
- Meet the 'Women Warriors' Protecting the Amazon Forest - EcoWatch ›
- Indigenous Tribes Are Using Drones to Protect the Amazon ... ›
- Amazon Rainforest Will Collapse by 2064, New Study Predicts ... ›
- Deforestation in Amazon Skyrockets to 12-Year High Under Bolsonaro ›
- Amazon Rainforest on the Brink of Turning Into a Net Carbon Emitter ... ›
EcoWatch Daily Newsletter
By Anke Rasper
"Today's interim report from the UNFCCC is a red alert for our planet," said UN Secretary General Antonio Guterres.
The report, released Friday, looks at the national climate efforts of 75 states that have already submitted their updated "nationally determined contributions," or NDCs. The countries included in the report are responsible for about 30% of the world's global greenhouse gas emissions.
- World Leaders Fall Short of Meeting Paris Agreement Goal - EcoWatch ›
- UN Climate Change Conference COP26 Delayed to November ... ›
- 5 Years After Paris: How Countries' Climate Policies Match up to ... ›
- Biden Win Puts World 'Within Striking Distance' of 1.5 C Paris Goal ... ›
- Biden Reaffirms Commitment to Rejoining Paris Agreement ... ›
India's New Delhi has been called the "world air pollution capital" for its high concentrations of particulate matter that make it harder for its residents to breathe and see. But one thing has puzzled scientists, according to The Guardian. Why does New Delhi see more blinding smogs than other polluted Asian cities, such as Beijing?
- This Indian Startup Turns Polluted Air Into Climate-Friendly Tiles ... ›
- How to Win the Fight Against Plastic - EcoWatch ›
In a historic move, the Delaware River Basin Commission (DRBC) voted Thursday to ban hydraulic fracking in the region. The ban was supported by all four basin states — New Jersey, Delaware, Pennsylvania and New York — putting a permanent end to hydraulic fracking for natural gas along the 13,539-square-mile basin, The Philadelphia Inquirer reported.
- Appalachian Fracking Boom Was a Jobs Bust, Finds New Report ... ›
- Long-Awaited EPA Study Says Fracking Pollutes Drinking Water ... ›
- Pennsylvania Fracking Water Contamination Much Higher Than ... ›
Colombia is one of the world's largest producers of coffee, and yet also one of the most economically disadvantaged. According to research by the national statistic center DANE, 35% of the population in Columbia lives in monetary poverty, compared to an estimated 11% in the U.S., according to census data. This has led to a housing insecurity issue throughout the country, one which construction company Woodpecker is working hard to solve.
- Kenyan Engineer Recycles Plastic Into Bricks Stronger Than ... ›
- Could IKEA's New Tiny House Help Fight the Climate Crisis ... ›