Shell Chief Executive Ben van Beurden says he is wary of switching completely to renewables as it may threaten the very survival of the company.
“We cannot do it overnight because it could mean the end of the company,” he said. “It will take an unprecedented amount of effort to bring about a net zero emissions future. If collectively we find a way to stay within the 2 degree limit, we will still need significant investment in oil and gas…I am talking about up to a trillion dollars every year.”
Major investors have been applying pressure on Shell to increase focus on renewables in order to mitigate climate change risks.
97 percent of Shell shareholders at its annual meeting on Tuesday rejected a resolution to invest profits from fossil fuels to become a renewable energy company. The Anglo-Dutch firm had previously said it was against the proposal.
Oil and gas companies have come increasingly under the spotlight particularly after the COP21 agreement in Paris at the end of last year and its reinforced goal to limit global carbon emissions.
Van Beurden said all the top 10 solar companies in the world represent $14bn in capital employed and invested $5 billion in solar energy last year, but none had so far paid any dividends.
Shell is setting up a dedicated ‘new energies’ unit that will incorporate its wind and solar as well as hydrogen and biofuel investments, an internal memo seen by Reuters showed.
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