Media briefing: Shell Q2 profits announcement

Spokespeople available: Maja Darlington, Make Polluters Pay Campaigner at Greenpeace UK, and others are available for interviews on this subject. Please contact Joe Evans at joe.evans@greenpeace.org or call +44 7890 595387 to arrange a date and time.

At a glance

• With the price of oil and gas remaining high, Shell is expected to once again post profits in the billions when it announces Q2 earnings on Thursday 27 July at 07:00 BST.
• During Q1 of 2023, Shell earned $9.6bn (£7.6bn) – or £57,000 per minute – in profits, handing a whopping $2bn to shareholders in dividend payments and promising a further $4bn in share buybacks. These profits are over three times the bill for damage caused by Hurricane Fiona, which wreaked havoc in Canada and the Caribbean last year.
• Since then, the world has been rocked by further climate change-linked extreme weather events including recent extreme heat waves across Europe, North America and Asia, with temperatures in Southern Europe nearing 50°c. On July 3, the world’s average temperature reached a record high, topping 17°c for the first time since records began at the end of the 19th century.
• Despite this, new CEO Wael Sawan has rowed back on Shell’s green targets, including pledges to cut production. Shell’s head of renewable generation Thomas Brostrom and head of offshore wind Melissa Read have both subsequently resigned, amid rumours that Shell is considering selling its renewable power business.
• In an interview, Sawan described cutting production as “dangerous and irresponsible”, despite Shell admitting that limiting global temperature rise to 1.5c requires an immediate end to fossil fuel growth.
• Greenpeace is calling for Shell and other oil giants to pay for climate loss and damage caused by their industry by paying into the Loss and Damage fund agreed at COP27.

Extreme profits, extreme weather

• Over the last ten years, Shell made over $178 billion profit, including a record $39.9 billion in 2022.
• Since Shell’s last profit announcement, extreme weather eventsExtreme weather events are made more likely and more intense by climate change, but not every event can be attributed to climate change. A useful guide for journalists on this topic is published by World Weather Attribution. have included: Cyclone Mocha in Myanmar and Bangladesh, catastrophic wildfires in Canada, record-breaking heatwaves in Asia and Europe, and North America, ongoing drought in East Africa and Southern Europe and floods in Central and East Africa, Spain, Japan, India, Pakistan, Turkey and China and the US, while both the Antarctic and Arctic sea ice extent remain at record lows.
• In Myanmar and Bangladesh, the UN said it needed $375 million in emergency relief supplies alone for the millions of people affected, while Canada’s wildfires are predicted to cost over $C1bn ($753m) in fire suppression efforts alone.
• Climate change-linked extreme weather events are projected to become more frequent and more intense in the coming years. The World Meteorological Organisation expects the 2023 El Niño — a naturally-occurring weather phenomenon — to supercharge warming caused by burning fossil fuels and cause average global temperatures to temporarily exceed 1.5ºc, potentially costing the global economy as much as $3.4 trillion, the equivalent of $425 for every person earth or 15.3 Olympic-sized swimming pools full of $100 bills.
• The growing cost of damage caused by extreme weather is rendering whole areas of the world uninsurable and fatally overstraining existing disaster relief and humanitarian aid funds. Following years of devastating wildfires, California’s largest home insurance company announced in May that it would stop selling coverage to homeowners statewide, citing “rapidly growing catastrophe exposure”.

Controversies

• Yet another oil spill from Shell’s Trans-Niger Pipeline on 26 June contaminated farmland and a river, upending livelihoods in fishing and farming communities in the Niger Delta. This area has long endured environmental pollution caused by the oil industry, and Shell has already faced legal action for the pollution it has caused there.
• Despite many Church investors long defending their investment in Shell, in July the Church of England finally divested from Shell and other fossil fuel companies following years of internal and external pressure, citing fossil fuel companies’ failure to show significant ambition to decarbonise.
• In May, Shell was fined $10 million after acknowledging that its massive new petrochemical plant in Pennsylvania violated the state’s air pollution limits. CEO Wael Sawan dismissed the violations as “technical niggles”.

Greenwashing and corporate backsliding

• Since posting bumper Q1 profits, Shell has followed BP by abandoning plans to cut oil production each year until 2030 in search of even higher profits
• Laura Hoy, analyst at financial service Hargreaves Lansdown, describes oil companies diluting their green pledges as a ‘risk’, noting that “given… Shell reported better-than-expected profits… you’d be forgiven for questioning the need to change course.”
• While Shell boasts that it has invested $2.4 billion into its ‘renewables’ arm, once actual spending on genuine renewables like wind and solar is stripped out the figure is closer to $288 million. In June, the UK’s advertising watchdog banned ads promoting Shell’s green initiatives for failing to inform consumers that most of its business is based on fossil fuels.
• Backsliding on green pledges by oil majors has focused attention on December’s COP 28 talks in Dubai, where COP President Sultan al-Jaber has given fossil fuel companies an unprecedented role. Al-Jaber heads the UAE’s national oil company. In July, Al-Jaber stated that fossil fuel phase out is “inevitable” and “essential”, but has insisted that the fossil fuel industry must play a role in the transition.
• During the Bonn climate talks in June, UN Secretary-General António Gutterres described fossil fuels as “incompatible with human survival” and warned that fossil fuel lobbying threatened to “kneecap progress” on climate action.

Climate loss and damage

• Much of what is being lost to climate change can never be replaced. Ways of life, cultures, nature and security for future generations are priceless. But finance is needed to pay for things like rebuilding infrastructure and emergency relief, particularly in countries most affected by climate change, which have some of the lowest greenhouse gas emissions in the world.  Those costs can not and should not be shouldered by those least to blame, yet most impacted by climate disasters.
• As the cost of extreme weather spirals, governments at COP 28 face the vital task of building on last year’s historic agreement to establish a Loss and Damage Fund to help those countries most vulnerable to the climate crisis address the destructive effects of climate change. In June UN Climate Change Executive Secretary Simon Stiell described the loss and damage fund as “a lifeline” for billions of people around the world.
• With states set to decide at COP 28 on how the fund is filled, Greenpeace is calling for it to be financed by taxes on the  revenues of those with the most responsibility for causing the climate crisis – starting with fossil fuel companies like Shell.
• By 2030, climate-induced loss and damage is estimated to cost developing countries between USD 290-580 billion per year. Yet it has been estimated that the fossil fuel industry made enough super-profits between 2000 and 2019 to cover the costs of climate-induced economic losses in 55 of the most climate-vulnerable countries nearly 60 times over. Huge revenues have been generated, but those countries and companies most responsible for the crisis have yet to pay.
• According to new analysis, the climate finance targets of developed countries will provide just ~$57 billion a year by 2025, despite the UNEP estimating that the most affected countries already require $160-340 billion a year in climate change adaptation costs alone, projected to rise to as much as $565 billion a year by 2050.

Corporate Accountability

• Around the world, popular resistance to fossil fuel companies is growing, with people-powered legal actions on the increase aimed at holding those responsible for the climate crisis accountable and creating a more just and peaceful world.
• In just three years climate litigation cases have nearly doubled and an unprecedented number of key judgments with potentially far-reaching impacts have been issued, including in the cases against Shell in the Netherlands and Shell in South Africa, against Total, against ENI and a landmark inquiry into the climate and human rights responsibility of all major fossil fuel and cement companies. In the UK, Greenpeace has lodged a legal bid to halt Shell’s development of the North Sea Jackdaw gas field, which was approved by the UK government in June 2022.

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