Shell’s bumper £6.1bn profits sparks anger from climate campaigners

Think-tank the IPPR said Shell ‘can’t be trusted to drive the green transition’

Shell has unveiled further returns for shareholders after better-than-expected earnings as the oil giant faces mounting investor pressure over its action to tackle climate change (PA Archive)

Shell has reported better-than-forecast profits of £6.1bn but sparked a fresh row over its commitment to climate change targets and investing in renewable energy.

The oil and gas giant’s underlying earnings for the first three months of 2024 were £6.1 billion, down a year earlier from 7.7 billion, however the result was better than forecast and 6 per cent higher than earnings in the previous quarter.

The FTSE 100 firm also lavished its shareholders with a £2.8 billion in share buybacks, on top of the £2.8 billion that it completed in the first three months of 2023.

Chief executive Wael Sawan said: “Shell delivered another quarter of strong operational and financial performance, demonstrating our continued focus on delivering more value with less emissions.

“We continue to deliver on our Capital Markets Day targets, giving us the confidence to commence another 3.5 billion US dollar buyback programme for the next three months.”

However the figures prompted a fierce response from environmental groups and think-tanks who questioned the firm’s committment to its green policies.

The Institute for Public Policy Research (IPPR) think tank said the figures showed just £329 million was spent on renewables in the first quarter and criticised the multi-billion pound payouts to shareholders.

Dr George Dibb, associate director at IPPR, said:“It is crystal clear that left to its own devices, Shell can’t be trusted to drive the green transition.”

He added: “It’s time for the government to step in and introduce a share buyback tax, so the UK has the funds to deliver a large programme of green investment.”

A member of Shell staff on the Bonga offshore oil Floating Production Storage and Offloading vessel off the coast of the Niger Delta in Nigeria (AP)

Shell said its total spend on lower carbon solutions across the whole of its business is far higher, at £4.5bn last year. It added it is investing an additional £8bn-12bn between 2023 and the end of 2025 in low-carbon energy solutions.

Greenpeace urged governments around the world to back a “climate changes tax” and pointed out that meetings were occurring on Thursday between climate leaders on how best to mitigate damage.

Charlie Kronick, senior climate advisor at Greenpeace UK, said: “On a day where climate leaders are negotiating in Abu Dhabi how to help the world’s poorest meet the skyrocketing costs of climate loss and damage, Shell continues to bank billions from flogging the fuels that are driving the crisis. With countries experiencing the worst impacts of climate change among those least responsible for it, the case for making polluters pay for the damage their industry is causing could not be clearer.

“Innovative proposals like a ‘climate damages tax’ could unlock hundreds of billions in funding for those at the sharp end of the climate crisis while accelerating a rapid, just transition away from fossil fuels around the world. We need our leaders to find their backbone and finally hold Shell and the rest of the industry to account for their reckless hunt for ever higher profits.”

Alexander Kirk, Fossil Fuel Campaigner at Global Witness, said: “Shell continuing to rake in huge sums of money shows us that huge polluter profits were not a one-off but are the twisted reality of an energy system that benefits climate-wrecking companies to the cost of everyone else.”

“Companies like Shell saw record profits while the energy crisis dragged millions of families into poverty through unaffordable energy bills. Meanwhile fossil fuel giants fought hard against paying more tax.

“This is the sad irony of the global energy system in which those causing chaos are the ones getting rich. This spiral won’t stop until we make the urgent switch to a fairer renewable energy system that puts both people and planet first.”

The profit figures come ahead of what is expected to be a challenging annual general meeting on May 21, with a group of major investors in Shell calling for the group to take further action on emissions and climate change.

The investors – led by activist shareholder Follow This – have filed a resolution ahead of the AGM urging the company to align its greenhouse gas emissions targets with the Paris Agreement.

This article was amended on the day of publication. It previously quoted the IPPR as saying that Shell’s marketing budget was bigger than its renewables budget, but the institute retracted that claim following an objection from Shell regarding definitions of different segments of its business.