Global Witness has filed a complaint with the SEC accusing Shell of “greenwashing,” misrepresenting its climate risk data. The full text is below. Highlights [footnotes omitted, emphasis in the original]:
According to Shell’s most recent annual report, the company directed 12% of its capital expenditure to Renewables and Energy Solutions in 2021. However, according to Global Witness analysis of figures reported by Shell, as detailed below, the company spent just 1.5% total capex on developing renewable sources of energy such as wind and solar. We therefore ask the Commission, second, to examine whether including gas in RES without reporting how much spending Shell directs to gas has caused Shell to omit material facts necessary to its investors’ clear understanding of Shell’s purported energy transition. In addition, we ask the Commission to further examine whether Shell’s reported capex on RES may include so much gas spending that labelling the segment “Renewables and Energy Solutions” constitutes a materially misleading misstatement.…
Shell’s Renewables and Energy Solutions reporting segment is mislabeled because it includes fossil fuel-related activities that are neither renewable nor energy solutions.
Renewables and Energy Solutions appears to include a number of gas-related activities. Shell has described the content of RES as follows: “Integrated Power – customer solutions, marketing and trading of power, renewable electricity generation; Gas Marketing and Trading – supply of natural gas to utility, industrial and retail customers; Hydrogen – production and supply of decarbonized hydrogen; Nature & Environmental Solutions – trading of carbon credits and investment in nature-based products that avoid or reduce carbon; Carbon Capture & Storage – developing commercial CCS hubs.”
Gas, which bears no relation to renewables or energy solutions, plays a role in nearly all of these components, from “gas marketing and trading” – i.e., Shell’s business of buying pipeline gas and selling it to customers, to “integrated power.” A substantial portion of the power Shell delivers to its customers as part of its “Integrated Power” activities appears to be gas-generated. Global Climate Insights (GCI), an Australasian non-profit that conducts company-level analysis for investors, estimates that renewable electricity generated by Shell made up just 3% of the power Shell delivered in 2020, and 4% in 2021. By contrast, electricity from gas produced by Shell made up 62% of sales in 2020 and 30% in 2021, with the remainder made up of third-party sales….Even Shell admits that “[t]he world will need less oil and gas as it moves to a low- and zero- carbon energy system.”30 Far from a “solution,” gas is part of the problem.