Global warming: Shell’s management and their contribution

Global warming and Shell’s part in the subject
Shell put green energy on the back burner for years. Now, it returns into the market.

 The end of the fossil era is in sight and that puts some pressure on oil and gas companies to think about a future without oil and/or gas. This also applies to Shell, which is in the oil production since the 19th century.

More and more investors are worrying about the consequences of the climate change for Shell. A worldwide climate treaty is been concluded in Paris. The aim of the treaty is to limit the global warming with two degrees. This means that Shell can and may produce less gas and oil in the long run. But what is Shell doing to prevent the global warming? And are the investments they’re doing as good as they tell us?

Research has shown that Shell is investing in projects which are unnecessary when it comes to achieve the climate objectives (Mark Campanale). Shell planned unnecessary projects for at least 7 billion dollars. Within the entire branch, 1 trillion dollars is being thrown away to projects that don’t fit within the climate objectives. We think it’s bizarre that so much money is being wasted by Shell. In our opinion, Shell should put the money in the economy for more useful projects like wind energy and energy savings.

Of the 30 billion dollars of investments, Shell is putting just a quarter into the search for alternative, sustainable energy sources. However, Ben van Beurden (CEO Shell) claims that the demand for oil and gas should decrease before he can make a large turnaround. Van Beurden says that it’s not possible to reshape the entire energy system on his own.

In our opinion it is a matter of supply and demand, which determines the price setting.  Think about the hybrid or electric cars: the demand is still low, which means that the prices are high. We think the demand will increase as soon as the prices are getting lower. At this point, the demand for petrol is high because a gasoline car is cheaper than a hybrid/electric car and the petrol prices are bearable.
By the way, in former times Shell was the one who bought all the patents for electric or hybrid cars to prevent their demand to petrol would decrease and they would make less money.

To prevent the global warming, we can try to make sure a part of our fossil fuels is not being burned, so we don’t cause a formation of CO2 emissions. Every day we emit huge amounts of CO2 by travelling, living and working. This CO2 emission is harmful for our environment. To control the damage we can start using ‘green energy’. Shell should cooperate by investing in windfarms and investing in other alternative, sustainable sources of energy and they should limit the production of oil and gas. But to be honest, the society has her responsibility as well. When Shell for example should make alternative sources of energy more accessible and the classic oil and gas less accessible, the society will make the turnaround.

So in our opinion, Shell should produce less oil and gas and should be investing more in green energy. They can be profitable as well with green energy and this would help to limit the global warming. When such a big player on the market continues with offering the society the bad choice (gas and oil) and even obstruct the better choice, the global warming will increase and that is bad for all of us.

What’s your opinion about this subject? Do you think Shell should take more responsibility? Or should they continue being profitable in the classic way and serve their shareholders?

Let us know in a comment below!


4 thoughts on “Global warming: Shell’s management and their contribution

  1. Hi, Thanks for your blog!
    My opinion about the subject is that Shell is not completely responsible for the global warming. Shell is just a massive company who wants to make profit and you can’t blame them for that. I think governments and institutions like the UN should make rules and ideas to stop the global warming and they are the ones that need to make sure that companys obbey these rules. because I think that you can’t give big companies like Shell this responsibility. It is ridiculous how much money shell is wasting in useless projects. What they should do is invest this money in projects to develop cheaper electric cars so they can keep making money when there is almost no oil or gas left in the world, because that is going to happen one day. Then they help to limit the global warming and they can make profit for their shareholders.

    Liked by 1 person

  2. Hi mark,

    Thanks for your response!
    I think you came up with a great solution.
    But do you know that they got in the way of the development of electric cars so far?
    The idea is great, but we are not so sure about the execution!

    However, your point about the government and other institutions and their responsibility is also something we agree on. What kind of regulations do you suggest?

    Let us know!
    And thanks again.

    Team Management of Organizations


  3. Hello,

    Nice blog you have made. Thank you for that.

    I found one sentence in particular interesting: “Think about the hybrid or electric cars: the demand is still low, which means that the prices are high.”
    Isn’t it so that when the demand is low, the prizes should drop?
    There are more and more hybrid and electric cars nowadays, so I should guess it should get cheaper.

    I think it is also a cultural issue.
    The greater majority of the people stick to the things they know, which is the traditional car.
    Also the hybrid and electric cars are still “weird” to fill up. You have to have a special station, which isn’t available everywhere.
    Besides that, the technology isn’t well developed yet. If you have a good electic car you can drive from the east to the west of the Netherlands before you need to fill up again.
    They should develop it better and go beyond the early adapters to get the business really going.

    In short I think Shell plays a role in preventing global warming, but they are not the only ones.
    Even the government or other institutions, like Mark stated, aren’t able to stop the global warming.
    Only we, as world consumers, are the people who can change the climate.

    Best regards,

    Liked by 1 person

    • Hi Han,

      Thanks for your response!

      To respond on the matter of the low demand and the high price: with products like bread this is absolutely true, if lots of people sell bread but there are not as many people who would like to buy bread, they want to get rid of it, so the price stays low.

      Electric cars in the contrary, involve lots of R&D costs: a company like Tesla has to do a big investment to develop and produce an electric car. When there are not enough people who would like to buy an electric car, they’ll keep their prices high because they want a return on their investment.

      We definitely agree that they sould improve the accessibility of an electric car. But they will probably improve this when more people are driving an electric car.

      Interesting to hear that you say that Shell and other institutions have a responsibility but that the customers are the people who can change the climate. Can you explain yourself?

      Kind regards,
      Management of Organizations team


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