- Shell dedicated only 8% of its budget to renewables last quarter.
- Profits for Q3 hit $6 billion, driven by gas sales despite lower oil prices.
- The company continued share buybacks, handing over $3.5 billion to investors.
- Climate activists slam Shell for emphasizing fossil fuels over renewable investment
Thus, Shell’s Q3 2024 financial report noted how it spent the $33 billion budget on only 8 percent for renewals as it also posted some neat profit margins as well as increased shareholders’ return on investment. But after all its criticism by those opposing climate change, they say their so-called thrust on fossil fuels might be costing the environment as well as running out of business itself in decades to come.
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The Q3 invested $409 million in renewables and energy solutions from nearly $5 billion of capital expenditure. That’s a pretty steep cut on the renewable energy focus by a company that has put itself forward as a low-emissions leader. The firm’s investments in renewables reduced while Shell reported profits far above expectations at $6 billion for the quarter, fueled by healthy gas sales, even if the oil market is weak.
This kind of focus on fossil fuels jeopardizes the future of the company,” said Mark van Baal, founder of activist group Follow This. Chief Executive Wael Sawan countered that Shell is still delivering “more value with fewer emissions” and building resilience in its balance sheet.
The other industry, Shell’s gas sector, was the largest producer of this quarter. It fetched $2.9 billion in revenues compared to the same period last year which was only $2.5 billion. The industry has gained immense momentum owing to Shell’s target for growing production even though more development of the oil and gas industry is said to set back the global climatic target. Shell anticipates long-run growth of its gas operation, though the move faces harsh criticism.
As if to enhance the windfall on shareholder confidence, Shell set up a $3.5 billion stock buyback. Buybacks that run consecutively for 12 quarters distributed more than $23 billion to shareholders last year alone.
The amount sums up nearly half of Shell’s operational cash flow. In another new development, Sawan has unveiled a plan to take out up to $3 billion in cost by 2025 from the oil, gas, and low-carbon units, that apart from jobs will eat into the operating costs of Houston, The Hague and to an extent at the UK facilities. In response its own employees protested the move inside Shell headquarters, appealing to management to stick to its commitments towards renewable investment.
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The decision to spend on buybacks rather than new renewable capacity has been attacked with scathing criticism. Greenpeace UK campaigner Aakash Naik mocked Shell’s buybacks, saying that the payments to shareholders have nothing to do with the company’s responsibilities towards the environment.
“Devastation from climate storms is already being seen all over the world,” he said. “This round of international climate talks is perhaps the last chance to break off fossil fuel dependence.”.
Shell’s latest earnings report shows a rising pressure between the profitable fossil fuel business and the need for increasing investments in renewable energies. The company continues on a path of shareholder-driven strategies, but its future role in the clean energy transition remains uncertain, particularly with growing global climate discourse.
