Oil and gas giants BP and Shell are reportedly failing to do their bit towards combatting climate change and this is putting shareholder capital at risk.
The companies have been described as “dragging their feet” by ShareAction, a non-profit that promotes responsible investment. The damning description is backed by claims that neither BP nor Shell has taken appropriate steps to reform its business model in order to comply with the general transition towards a low carbon economy.
This statement directly contradicts another report, which says that a number of businesses across Europe, including Shell, have entrenched the issue of climate change into their company strategies.
Nevertheless, ShareAction is speaking loud and clear on this issue and has encouraged shareholders to take action as well. They are advised not to leave the problem dormant and to engage with boards and management in order to see the issue resolved.
The non-profit further suggests that investors in both BP and Shell should insist on seeing fully fleshed out plans as to how the companies plan to reduce their total lifecycle emissions. The companies should also be prepared to disclose how they plan on incorporating any future climate legislation that is to be passed within the jurisdictions in which they operate.
If the companies fail to correctly implement policies that would encourage the use of renewable energy and wean the public off its dependence on fossil fuels, it will put millions of savers at risk. Indeed, many pension portfolios feature either Shell or BP and so a plunge in share price could be disastrous for those who count on these companies in their savings.
ShareAction’s Senior Campaigns Office, Michael Chaitow, has noted that Shell and BP are operating conflicting policies. On the one hand they are openly backing the Paris Agreement but on the other, they are simultaneously planning for actions that could directly contravene it.
In response to the claims lodged against it, BP has said that it is going to do its best to rise to the challenge of aiding the transition to a lower carbon future whilst still providing reliable energy to a world that is growing in population every day.