Oil heavyweights Shell and BP are privately anticipating a world where global temperatures will have risen by nearly 10 degrees Fahrenheit (5 degrees Celsius) by the year 2050, according to a report by investment campaign group ShareAction. This is more than double the upper limit agreed upon by most of the world’s nations in the Paris Climate Agreements- which both companies publically supported.
This disparity between public endorsement and policy with private awareness has led to accusations that the two oil giants are misleading both its shareholders and the public.
Many scientists have gone on record that a global temperature rise of even 3.6 degrees Fahrenheit (2 degrees Celsius) would be catastrophic. This would mainly be due to the loss of sea ice would reflects much of the sunlight that reaches the earth surface, in turn further accelerating the rate of global warming and unleashing longer summers, extreme temperatures, and harsh tropical storms.
The ShareAction report also claims these actions has put millions of pensions at risk.
Catherine Howarth, a chief executive at ShareAction, said that the chief executives of both Shell and BP are running companies that seem “…poorly prepared for the speed of technological and economic change now underway in the global energy market.”
She later added, “Millions of pension savers are exposed to Shell and BP’s shares. These reports challenge the professional investors looking after our pension savings to manage the growing financial risks facing BP and Shell more actively in the coming year.”
Two years ago both Shell and BP shareholders overwhelmingly voted to require each company to make in-depth disclosures regarding climate risks to their business. At the time a spokesman for BP said, “As a result of the vote, annual reporting at BP will now be significantly expanded with additional transparency around operational emissions management, asset portfolio resilience, low carbon energy R&D and investment, executive incentivisation during the low carbon transition and public policy activity relating to climate change.”
Although both companies have met these requirements in the strictest sense, ShareAction claims that they are purposefully failing disclose their vision of the future of the climate to shareholders and the public. Worse yet, the report states that neither company is truly investing in the post-carbon business model which would be required to avoid that level of climate change.
Specifically, it cites evidence that neither company has set an emission reduction target and that current investments in renewable energy are both negligible and stagnating. BP invests merely 1.3 percent of its total capital expenditure in low-carbon projects, while Shell has pledged to invest 3 percent of its annual budget on low-carbon by 2020.
Additionally, top executives at both Shell and BP are given massive incentives to pursue strategies focused on oil and gas, including monetary bonuses over the next three to six years for various fossil fuel projects- strategies and projects which will endanger shareholders in the decades to come.
All this despite both companies’ public reassurances that they are thinking “beyond petroleum.”
Michael Chaitow, a senior campaigns officer at ShareAction, called it an “uncomfortable discrepancy” later stating “Shell and BP want to have their oil and drink it too, by advocating for the landmark Paris Agreement to limit global temperature rises to below 2 degrees Celsisus, while planning for scenarios that would violate it.”
Neither BP nor Shell has commented at this time.
Article written by HEI contributor Kevin Abbott.