May 9, 2021 - Energy & Environment

Shell CEO: You need us on climate change

Royal Dutch Shell CEO Ben van Beurden wants a seat at the table to fight climate change, and wants the public and policy makers to believe the oil and gas company is serious about shifting its massive business. 

Why it matters: The problem is, “in many parts of society, everything we say is wrong,” he tells “Axios on HBO.”

What he’s saying: "Many governments do not want to be seen listening to us,” he said. “I don't like it, but it's nevertheless a reality.”

  • "What quite often I think is insufficiently understood is that companies like us are absolutely needed for the solutions that the world needs."
  • "If you believe that the energy transition is going to be solved by start-ups or companies that have yet to be invented, then I would say dream on."

Driving the news: Shell’s multi-decade plan to move away from oil is being put to a shareholder vote later this month.

  • This is the first time that an oil “supermajor” is asking its investors to endorse a transition and to start to hold regular progress reviews. 
  • Some investor groups and activists don’t believe the goals go far enough, and say they fall short of aligning with goals from the Paris climate agreement. 
  • But van Beurden says Shell’s approach is to focus on how its oil and gas products are used versus how the company supplies them.
  • “We sell four times as much as we produce ourselves, [so] it would be a bit pointless if we would just say … we will produce a little bit less, but we will buy it from somebody else then and still put it into the market.”

The big picture: “The pandemic has shown how hard it is to do this energy transition,” he said.

  • Emissions dropped dramatically during the pandemic (and have already resumed their climb) but he says it's not realistic to replicate that impact after the pandemic subsides: "That is just not going to happen."

Be smart: Van Beurden acknowledges that fighting climate change is in Shell's interest, too.

  • The company itself is vulnerable to climate impacts — operations in the Gulf of Mexico getting hammered by hurricanes, liquified natural gas terminals in the Middle East experiencing extreme heat — and demand for clean energy is already growing, pushing the market in that direction.
  • "Our actions are in light of self-interest more than I think a lot of people believe, [which is that] it's all greenwash."
  • "If we do not adjust our operations, if we do not adjust our product mix, we will be caught out at some point in time by other realities."

The bottom line: Shell is trying to build the foundation for a future version of itself that extinguishes its current identity.

  • Van Beurden has been CEO for the past seven years, but he has been with the company his whole professional life — 38 years.
  • He has four children, the youngest 11, and by the time they go to college and see the Shell logo, he wants them to think and "believe that this brand stands for progress ... for solving solutions that the world needs to solve one customer at a time."
  • "My mantra is, if you don't shape demands, you are going to be shaped by it one way or other."

Axios' Ben Geman and Andrew Freedman contributed reporting.

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