Report identifies divestment and climate litigation as material risks to the company’s bottom line
GLOBAL — Shell’s Annual Report should be seen as a clear warning to investors that the age of fossil fuels is coming to an end, according to campaigners with 350.org.
May Boeve, Executive Director of 350.org issued the following statement:
“This is a clear sign the fossil fuel divestment movement is winning and the age of fossil fuels is coming to an end. Take it straight from Shell: the time to get out of fossil fuels is now.
Protests, divestments, litigation, and regulatory efforts will only increase over the coming years, putting Shell and fossil fuel companies on ever more precarious footing. Just this month the American Medical Association divested from fossil fuels and the Pope said we must keep coal, oil and gas in the ground — this movement isn’t going away.
Shell should be particularly worried about climate litigation since investigations show that Shell, like Exxon, knew about the risks of climate change years ago and lied to the public about it. Just like Big Tobacco, Big Oil perpetrated a cover up of epic proportions and must be held accountable.
We’ve long said that the fossil fuel industry’s business plan is incompatible with a safe climate. That logic finally seems to be sinking in. It’s time to phase out the fossil fuel industry and build a new, just and equitable, 100% renewable energy world for all.”
The report mentions a number of climate-related risks that Shell says could dramatically impact the company’s bottom line in the coming years: “Rising climate change concerns have led and could lead to additional legal and/or regulatory measures which could result in project delays or cancellations, a decrease in demand for fossil fuels, potential litigation and additional compliance obligations.”
The report specifically identifies fossil fuel divestment campaign as a material risk: “Additionally, some groups are pressuring certain investors to divest their investments in fossil fuel companies. If this were to continue, it could have a material adverse effect on the price of our securities and our ability to access equity capital markets.”
It also highlights the risk of climate litigation efforts: “Further, in some countries, governments and regulators have filed lawsuits seeking to hold fossil fuel companies liable for costs associated with climate change. While we believe these lawsuits to be without merit, losing any of these lawsuits could have a material adverse effect on our earnings, cash flows and financial condition.”
Over 890 institutions representing more than $6.2 trillion in capital have made some form of fossil fuel divestment commitment. 350.org is an international climate campaign that works around the world to stop new fossil fuel projects and drive a fast and just transition to 100% renewable energy for all.