"Institutional investors are losing their patience (with Royal Dutch Shell). The whole world's economy is at risk because of climate change. Mark van Baal
Investors' patience with corporations holding Royal Dutch Shell stocks in the oil industry has worn thin. Global heatings amplification of natural catastrophes is seeing investors' returns slow. Frequent, intense, and threatening disasters from wildfires, storms, and floods impact investors' bottom line.
Note, market portfolio investors aren't worried about extinction by 2050, just their profits; if shareholders can force a quick decarbonization change in the fossil fuel industry SOP, then I am all for it.
In May of this year, the Hague District Court in the Netherlands ordered Shell to cut greenhouse gas emissions forty-five percent by 2030. The court found that the oil behemoth's decarbonization plan "is not concrete, has many caveats, and is based on monitoring social developments rather than the company's responsibility for achieving a CO2 reduction." Accused of slow walking and moving too 'cautiously," one report noted that Shell's emissions would increase by four percent.
The AP writes that Shell is walking a tightrope between investors and the climate extinction crisis:
LONDON – Royal Dutch Shell investors are expected to change the company’s name Friday and approve moving its headquarters from the Netherlands to the United Kingdom as the oil giant faces criticism it has been slow to cut greenhouse gas emissions.
Shell says the changes will accelerate payouts to shareholders and help the company shift its focus to renewable energy. Shareholders met Friday to vote on the plan, including a simplified corporate structure that will give the Anglo-Dutch firm a single class of shares and unify its headquarters in London.
The move illustrates the challenges oil companies face as they pivot from a business model that has generated huge profits and reliable dividend payments for shareholders toward a more uncertain future tied to wind, solar and biofuels. With returns from the new ventures still unknown, investors are demanding quick returns from existing assets, said David Elmes, an energy expert at the U.K.’s Warwick Business School.
“They’re walking a very difficult tightrope of keeping shareholders happy with the level of dividend and buybacks today versus getting permission from shareholders to switch investment from fossil fuels to low-carbon energy,” Elmes said. “And it seems to be at the moment, that they’re still having to pay an awful lot to shareholders today to get their support for the transition.”
Until now, Shell has had two separate classes of shares, one for its Dutch arm and one for its U.K. arm, which together comprise Royal Dutch Shell Plc. The structure is a legacy of the company’s creation in 1907, when a British import-export business that once traded in exotic shells merged with Royal Dutch to create what ultimately became one of the world’s biggest oil companies.
Meanwhile, a whopping ninety-nine percent of Shell shareholders back the resolution to move its operations from Amsterdam to the UK sometime in early 2022. The proposal will likely result in changing its name to Shell PLC.
Shell's critics say bullshit that the company's move is anything but a result of the Dutch court ruling that threw the book at them for its crimes against the planet.
The verdict marked the first time in history that a company had been legally obliged to align its policies with the Paris Agreement and reflected a watershed moment in the climate battle.
Shell has said its environmental policy would not be affected by the move.
"We think this is actually a relatively routine bit of corporate simplification, a kind of corporate tidying up exercise to deal with a complex bit of historical legacy that is simply no longer needed in the world that Shell now lives and operates in."
Stansbury said the oil giant would be able to return capital to shareholders more efficiently if the resolution was approved.
Shares of Shell were 0.8% higher during afternoon deals in London. The oil and gas company has seen its stock price climb roughly 33% year-to-date, having collapsed almost 45% in 2020.
A rebound in profits for oil and gas companies this year has prompted executives to reassure investors that they have gained a much more stable footing following a brutal year by virtually every measure in 2020.
A South African court has struck down an application from environmentalists to stop oil companies from using seismic blasts in search of the black gold off of South Africa's Wild Coast. Local protests erupted against Royal Dutch Shell underwater explosions that devastate whales, dolphins, penguins, and anything else that lives in this critical ocean habitat.
Mahalo, Greenpeace, and oceancollective.org.
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