Two years after internal documents surfaced showing that Royal Dutch Shell, like ExxonMobil, knew about climate dangers decades ago, the oil giant released its latest annual report outlining its business strategy and approach to addressing climate change. Despite clear warnings from scientists, global health experts and even central banks of impending climate-driven crises, Shell's report largely sends a message that everything is fine and the company's "business strategy is sound."
That is not to say that Shell is ignoring the challenges facing it and other oil majors. But overall Shell appears to be toeing the line between saying it is responding to the climate challenge and inevitable energy transition on the one hand, and maintaining its core oil and gas business model on the other.
Shell's 2019 Annual Report is filled with statements that reveal the company's perspective on the Paris agreement, the energy transition, and climate litigation and regulatory risk to its business. A few of these statements seem contradictory, and it is important to keep in mind the context of #ShellKnew when the company says now, in 2020, that it is committed to being part of the solution.
According to the report, there are three parts to Shell's overall strategy going forward: to thrive in the energy transition, to provide a world-class investment case, and to sustain a strong societal license to operate. That may sound good on paper, but in reality significant challenges are mounting for each of these pillars.
In terms of the energy transition, Shell appears to be paying lip service to it more than actually revamping its portfolio or overhauling its business model. Its core business remains oil and gas. Period.
The company may be ahead of some other oil giants like Exxon and Chevron in terms of adding alternative energies to its energy mix, but overall its commitment to clean energy is minimal.
Shell notes in its report that it spends "$1-2 billion a year until 2020 in different services and products from a range of cleaner sources," and "investments in power could grow to $2-3 billion a year on average" from 2021 to 2025. The vast majority of the company's capital expenditure ($24bn to $29bn in 2020) goes into oil and gas, and failure to replace proved reserves could have a "material adverse effect." Instead of aligning with the energy transition, Shell's business model is based on continual hydrocarbon exploitation.
In terms of a "world-class investment," the oil and gas sector is particularly vulnerable at the moment to financial pressure and investors are increasingly turning away from fossil fuels. Jim Cramer infamously dubbed fossil fuels "in the death knell phase." Shell acknowledges this risk. It notes in its report that fossil fuel divestment "could have a material adverse effect on the price of our securities and our ability to access capital markets."
Shell also recognizes its vulnerability to an eroding social license as the public and particularly younger generations start to scorn Big Oil.
"In 2019, many protested about climate change, sometimes directly targeting Shell," Shell CEO Ben Van Beurden wrote in the report. The company includes challenges to its reputation as a risk factor, noting, "There is increasing focus on the role of oil and gas in the context of climate change and energy transition. This could negatively affect our brand, reputation and licence to operate."
Shell did not immediately respond to a request for comment on the risk to its social license.
Shell Claims to Support Paris Agreement, Plans for Gradual Energy Transition
In its report, Shell says it fully supports the Paris agreement goal to limit warming well below 2 degrees C, and supports "the vision of a transition towards a net-zero emissions energy system." But, in contrast to fellow European oil major BP, Shell is not committing its own business to net zero emissions.
Shell says it has "no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years." Instead, Shell's Net Carbon Footprint "ambition" is to reduce emissions (including its customers' and suppliers' emissions) of its energy production and products by 20 percent by 2035 and by 50 percent by 2050. This is not aligned with climate science guidelines that say complete decarbonization or "net zero" is necessary by 2050 at the latest.
Shell's own business is therefore not aligned with the goal of the Paris agreement, and the company is facing a lawsuit over this in its home country of the Netherlands. Current emissions reduction plans or "Nationally Determined Contributions" (NDCs) submitted by countries under the Paris agreement are also inadequate. As Shell notes in its report, current NDCs amount to about 3 degrees C of warming. "In coming decades, we expect countries to tighten these NDCs to meet the goals of the Paris agreement," the report states. Shell's view appears to be that the world has decades to get its act together.
In that view, Shell says it is fully on board with the energy transition and plans to transform its own business "over time." The report includes statements like "Shell aims to become an integrated power player and grow, over time, a material new business", and, "for us, protecting the environment also means working to transform our product mix over time, for example, by expanding the choice of lower-carbon products we offer customers."
Yet, in a seeming contradiction to these statements, Shell says it "agrees with the Intergovernmental Panel on Climate Change (IPCC) 1.5°C special report," which clearly warned that limiting warming to 1.5°C would require, as Shell notes, "an even more rapid escalation in the scale and pace of change."
While Shell claims to fully support the Paris agreement, in another seeming contradiction, the company states in its report that the government action necessary to meet Paris targets could harm its business: "Policies and regulations designed to limit the increase in global temperatures to well below 2°C could have a material adverse effect on Shell – through higher operating costs and reduced demand for some of our products."
Shell also says it is wary of governments actually taking climate action: "we believe measures taken by governments to control national energy transitions may also have unintended consequences."
Yet, at the same time, Shell says it expects to be subject to increasing regulation. "We also expect that GHG regulation, as well as emission reduction actions by customers, will continue to result in suppression of demand for fossil fuels, either through taxes, fees and/or incentives to promote the sale of lower-carbon electric vehicles or even through the future prohibition of sales of new diesel or gasoline vehicles, such as the prohibition in the United Kingdom (UK) beginning in 2035. This could result in lower revenue and, in the long term, potential impairment of certain assets," the report states.
Climate Litigation Risk
Shell, like other fossil fuel companies, has long been concerned about governments imposing climate policies or regulations that would affect its business. Shell and its industry peers are already facing climate lawsuits, and Shell is explicitly identifying climate litigation as part of a broader risk factor associated with "rising climate change concern."
In its report, Shell acknowledged the lawsuits could negatively impact its financial condition: "In some countries, governments, regulators, organisations and individuals have filed lawsuits seeking to hold fossil fuel companies liable for costs associated with climate change. While we believe these lawsuits to be without merit, losing any of these lawsuits could have a material adverse effect on our earnings, cash flows and financial condition."
Shell actually foresaw climate-related lawsuits as a possibility more than 20 years ago. One of the internal documents that a Dutch news organization first uncovered (and published on the site Climate Files) is a 1998 document of Shell planning scenarios where the company hypothetically envisions a series of violent storms battering the eastern U.S., which then spur environmental NGOs to bring "a class-action suit against the US government and fossil-fuel companies on the grounds of neglecting what scientists (including their own) have been saying for years: that something must be done."
One statement from Shell's annual report rings particularly true: "Shell has long recognised that greenhouse gas (GHG) emissions from the use of fossil fuels are contributing to the warming of the climate system."
Indeed, Shell has long known that fossil fuels are warming the planet and that the consequences would be of a huge magnitude.
One internal Shell document from 1988 called "The Greenhouse Effect" warned that GHG emissions would lead to warming over the next century, likely ranging from 1.5 C to 3.5 C. According to that document, "The changes may be the greatest in recorded history." Some parts of the planet may become uninhabitable, and there may be "significant changes in sea level, ocean currents, precipitation patterns, regional temperature and weather," it says. Impacts could be severe and "could have major social, economic, and political consequences."
What did Shell do with that knowledge? It started introducing doubt and giving weight to a 'significant minority' of 'alternative viewpoints' as the full implications for the company's business model became clear.
Shell was a member of the Global Climate Coalition, a fossil fuel industry-funded group that worked to undermine climate science and block climate policy internationally. The group formed in 1988 and Shell was a member throughout much of the 1990s.
During that time Shell was not exactly upfront with its own shareholders about potential risks climate change posed to its business. The first time Shell even mentioned climate change was in a 1991 annual report. But it wasn't until 2004 that Shell made a clear warning in its annual report about financial risk associated with fossil fuel investment.
Critics have for many years accused Shell's of greenwashing — acknowledging the climate threat and touting its "commitment" to being part of the solution, despite continuing to spend heavily on oil and gas with only minimal investment in alternative energy. Shell's latest annual report suggests the company isn't deviating far from that strategy.
Reposted with permission from DeSmog.
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By Joe Roman and Taylor Ricketts
The COVID-19 pandemic in the United States is the deepest and longest period of malaise in a dozen years. Our colleagues at the University of Vermont have concluded this by analyzing posts on Twitter. The Vermont Complex Systems Center studies 50 million tweets a day, scoring the "happiness" of people's words to monitor the national mood. That mood today is at its lowest point since 2008 when they started this project.
The Hedonometer measures happiness through analysis of key words on Twitter, which is now used by one in five Americans. This chart covers 18 months from early 2019 to July 2020, showing major dips in 2020. hedonometer.org<p>These same tweets also indicate a potential salve. Before pandemic lockdowns began, doctoral student <a href="https://scholar.google.com/citations?user=0P0ZYbIAAAAJ&hl=en" target="_blank">Aaron Schwartz</a> <a href="https://doi.org/10.1002/pan3.10045" target="_blank">compared tweets before, during, and after visits to 150 parks, playgrounds and plazas</a> in San Francisco. He found that park visits corresponded with a spike in happiness, followed by an afterglow lasting up to four hours.</p><p>Tweets from parks contained fewer negative words such as "no," "not" and "can't," and fewer first-person pronouns like "I" and "me." It seems that nature makes people more positive and less self-obsessed.</p><p>Parks keep people happy in times of global crisis, economic shutdown and public anger. Research has also shown that transmission rates for COVID-19 are <a href="https://www.sfchronicle.com/news/article/Is-risk-of-coronavirus-transmission-lower-15287602.php" target="_blank">much lower outdoors than inside</a>. As scholars who study <a href="https://scholar.google.com/citations?user=yFzb2EUAAAAJ&hl=en" target="_blank">conservation</a> and how nature <a href="https://scholar.google.com/citations?user=CCnUeN8AAAAJ&hl=en" target="_blank">contributes to human well-being</a>, we see opening up parks and creating new ones as a straightforward remedy for Americans' current blues.</p>
Park Visits Are Up During the Pandemic<p>According to the Hedonometer, sentiments expressed online started trending lower in mid-March as the impacts of the pandemic became clear. As lockdowns continued, they registered the lowest sentiment scores on record. Then in late May, effects from George Floyd's death in police custody and the following protests and police response once again could be seen on Twitter. May 31, 2020 was the saddest day of the project.</p><p>Recent surveys of park visitors around the University of Vermont have shown people <a href="https://osf.io/preprints/socarxiv/sd3h6" target="_blank">using green spaces more</a> since COVID-19 lockdowns began. Many people reported that parks were highly important to their well-being during the pandemic.</p>
<div id="4c7e4" class="rm-shortcode" data-rm-shortcode-id="bc0ac146ab2a94228f32d973fc2ab272"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1289428912879964160" data-partner="rebelmouse"><div style="margin:1em 0">#Goldengatepark #sf #quarantinemood https://t.co/9l3ufnbkt6</div> — Suvd (@Suvd)<a href="https://twitter.com/Suvd19486406/statuses/1289428912879964160">1596258783.0</a></blockquote></div><p>The powerful effects of nature are strongest in large parks with more trees, but smaller neighborhood parks also provide a significant boost. Their impact on happiness is real, measurable and lasting.</p><p>Twitter records show that parks increase happiness to a level similar to the bounce at Christmas, which typically is the happiest day of the year. Schwartz has since expanded his <a href="https://arxiv.org/pdf/2006.10658.pdf" target="_blank">Twitter study</a> to the 25 largest cities in the U.S. and found this bounce everywhere.</p><p>Parks and public spaces won't cure COVID-19 or stop police brutality, but they are far more than playgrounds. There is growing evidence that parks contribute to mental and physical health in a range of communities.</p><p>In a 2015 study, for example, Stanford researchers sent people out for one of two walks: through a local park or on a busy street. Those who walked in nature showed <a href="https://doi.org/10.1016/j.landurbplan.2015.02.005" target="_blank">improved moods and better memory performance</a> compared to the urban group. And a team led by <a href="https://penniur.upenn.edu/people/eugenia-gina-south" target="_blank">Gina South</a> of the University of Pennsylvania showed in a 2018 study that greening and cleaning up blighted vacant lots in Philadelphia <a href="http://dx.doi.org/10.1001/jamanetworkopen.2018.0298" target="_blank">reduced local residents' feelings of depression, worthlessness and poor mental health</a>.</p>
Creative Strategies<p>It isn't easy to create new parks on the scale of San Francisco's Golden Gate Park or the Washington Mall, but smaller projects can expand outdoor space. Options include greening vacant lots, closing streets and investing in existing parks to make them safer, greener and shadier and support wildlife.</p><p>These initiatives don't have to be capital-intensive. In the University of Pennsylvania study, for example, renovating a vacant lot by removing trash, planting grass and trees and installing a low fence cost only about US$1,600.</p><p>Urban green space is most needed in neighborhoods that have lacked funding for parks, especially given <a href="https://www.nytimes.com/2020/04/08/nyregion/coronavirus-race-deaths.html" target="_blank">COVID-19's disproportionate impact on Black and Latinx people</a>.</p><p>Cities can also create parklike spaces by <a href="https://theconversation.com/with-fewer-cars-on-us-streets-now-is-the-time-to-reinvent-roadways-and-how-we-use-them-140408" target="_blank">closing streets to cars</a>. Many cities worldwide are currently retooling their transportation systems for the post-COVID-19 world in order to <a href="https://thecityfix.com/blog/bicycles-slower-speeds-livable-city-paris-mayor-anne-hidalgo-plans-ambitious-second-term-dario-hidalgo/" target="_blank">reallocate public space</a>, widen sidewalks and make more space for nature.</p><p>Urban designers, artists, ecologists and other citizens can play a direct role, too, creating pop-up parks and green spaces. Some advocates <a href="https://www.bloomberg.com/news/articles/2017-09-15/a-brief-history-of-park-ing-day" target="_blank">transform parking spaces into mini-parks</a> with grass, potted trees and seating for just the time on the meter, to make a larger point about turning so much public space over to cars.</p><p>Or cities can invest a little more. Minneapolis, Cincinnati and Arlington, Virginia, have won <a href="https://www.tpl.org/parkscore" target="_blank">national recognition</a> for their ambitious investments in public park systems. These areas could serve as models for neighborhoods that lack access to parks.</p>
<div id="25fd0" class="rm-shortcode" data-rm-shortcode-id="383f0d2df0237e9359c30dcce6cd6c42"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1276558744835379201" data-partner="rebelmouse"><div style="margin:1em 0">Looking to safely get outside? Check out the best parks for social distancing in this year's top ten ParkScore citi… https://t.co/HJjEtDsrTD</div> — The Trust for Public Land (@The Trust for Public Land)<a href="https://twitter.com/tpl_org/statuses/1276558744835379201">1593190296.0</a></blockquote></div>
A New Park Deal?<p>The United States has historically driven economic recovery with major infrastructure investments, like the New Deal in the 1930s and the 2009 <a href="https://www.investopedia.com/terms/a/american-recovery-and-reinvestment-act.asp" target="_blank">American Reinvestment and Recovery Act</a>. Such investments could easily include nature-positive spaces.</p><p>Parks are not panaceas, as evidenced by the widely publicized <a href="https://www.nytimes.com/2020/07/06/nyregion/amy-cooper-false-report-charge.html" target="_blank">racist confrontation between a white woman and a Black birder</a> in New York's Central Park in early July. But Hedonometer data add to a <a href="https://advances.sciencemag.org/content/5/7/eaax0903?utm_source=miragenews&utm_medium=miragenews&utm_campaign=news" target="_blank">growing body of evidence</a> that they provide <a href="https://doi.org/10.1073/pnas.1807504116" target="_blank">clear mental health benefits</a>. Creating and expanding parks also <a href="https://www.nrpa.org/contentassets/f568e0ca499743a08148e3593c860fc5/economic-impact-study-summary.pdf" target="_blank">generates jobs and economic activity</a>, with much of the money spent locally.</p><p>We believe investments in nature are well worth it, offering both short-term solace in difficult times and long-term benefits to health, economies and communities.</p>
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New York State Attorney General Letitia James announced Thursday that she will attempt to dismantle the National Rifle Association (NRA), arguing that years of corruption and mismanagement warrant the dissolution of the activist organization, as CNN reported.
<div id="7eb49" class="rm-shortcode" data-rm-shortcode-id="83819841e380a7072ec66d3186c160e8"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1291705003984510977" data-partner="rebelmouse"><div style="margin:1em 0">🚨RESPONSE to #Mauritius #OILSpill 🚨 “Once again we see the risks in oil: aggravating the #ClimateCrisis, as well as… https://t.co/PBLioZat6X</div> — Greenpeace Africa (@Greenpeace Africa)<a href="https://twitter.com/Greenpeaceafric/statuses/1291705003984510977">1596801446.0</a></blockquote></div><p>"There is no guaranteed safe way to extract, transport and store fossil fuel products. This oil leak is not a twist of fate, but the choice of our twisted addiction to fossil fuels. We must react by accelerating our withdrawal from fossil fuels," Greenpeace Africa Senior Climate and Energy Campaign Manager Happy Khambule said in a <a href="https://www.greenpeace.org/africa/en/press/11864/greenpeace-africa-response-to-mauritius-oil-spill/?utm_campaign=oil&utm_source=t.co&utm_medium=post&utm_content=single-image&utm_term=mauritius-oil-spill-reactive" target="_blank">statement Friday</a>. "Once again we see the risks in oil: aggravating the <a href="https://www.ecowatch.com/tag/climate-crisis" target="_self">climate crisis</a>, as well as devastating oceans and <a href="https://www.ecowatch.com/tag/biodiversity" target="_self">biodiversity</a> and threatening local livelihoods around some of Africa's most precious lagoons."</p>
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By Gianna-Carina Grün
While the first countries are easing their lockdowns, others are reporting more and more new cases every day. Data for the global picture shows the pandemic is far from over. DW has the latest statistics.
What's the Current Global Trend?<p>The goal for all countries is to make it to the blue part of the chart and stay there. Countries and territories in this section reported zero new cases both this week (past seven days) and the week before.</p><p>Currently, that is the case for 14 out of 209 countries and territories. </p>
How Has the Covid-19 Trend Evolved Over the Past Weeks?<p>The situation has improved slightly: 87 countries report more cases this week than last week. </p>
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