'This is the stark reality of climate injustice': Record Shell profits attract scathing criticism from green groups

'This is the stark reality of climate injustice': Record
Shell profits attract scathing criticism from green groups
'This is the stark reality of climate injustice': Record Shell profits attract scathing criticism from green groups

Oil and gas giant slammed over failure to investment more in clean energy after record profits saw it hike dividends and announce share buyback scheme

Shell has posted the biggest annual profits in the oil and gas giant's 115-year history, this morning revealing it made almost $40bn last year after global oil and gas prices soared following Russia's invasion of Ukraine.

The record profits - which are double the profits achieved in 2021 - attracted fierce criticism from politicians and green groups, who contrasted the firm's high earnings with soaring consumer energy costs and Shell's relatively low levels of investment in clean energy projects.

Shell immediately announced an increased dividend for shareholders as well as plans for a $4bn share buyback programme to be completed in the spring, prompting renewed calls for a stronger 'windfall tax' in the UK to direct more investment towards cleaner, more secure energy sources and energy efficiency programmes.

The company was slammed in October after admitting it had at that point managed to avoid paying any UK windfall taxes, despite its record profits. Shell said it was now due to pay $134m in UK windfall tax for 2022, and expects to pay more than $500m in 2023. 

Announcing the company's final quarter earnings for 2022 this morning, Shell CEO Wael Sawan said the strong results "demonstrate the strength of Shell's differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world".

Shrugging off criticism of the company reaping in such high profits from oil and gas at a time of acute cost of living and climate crises, he stressed Shell's intention to "remain disciplined while delivering compelling shareholder returns".

"We believe that Shell is well positioned to be the trusted partner through the energy transition," he said. "As we continue to put our Powering Progress strategy into action, we will build on our core strengths, further simplify the organisation and focus on performance."

Many oil and gas majors are expected to post strong profits in the coming weeks and months due to soaring global energy prices sparked by the ongoing conflict in Ukraine.

The situation has continued to attract scathing criticism from campaigners who have argued that policy failures have enabled oil and gas companies to profit so heavily off the back struggling households and businesses.

The government last year announced an Energy Profits Levy on oil and gas company profits designed to tackle the windfall profits being enjoyed by fossil fuel companies, but the levy contained loopholes that enabled firms to slash the amount of tax they pay if they invest above a certain threshold in UK projects. A similar tax, dubbed the Electricity Generator Levy, was also later introduced to target power generators including wind, solar, and other project, prompting warnings that the move could undermine investment in the net zero transition.

Responding to Shell's profit announcement today, Ed Miliband, Labour's Shadow Climate Change and Net Zero Secretary, said it was "only right that the companies making unexpected windfall profits from the proceeds of war pay their fair share".

"As the British people face an energy price hike of 40 per cent in April, the government is letting the fossil fuel companies making bumper profits off the hook with their refusal to implement a proper windfall tax," he said. "But when it comes to oil and gas interests, Rishi Sunak is too weak to stand up for the British people."

Greenpeace pointed out that Shell and other oil and gas firms continue to invest far more in fossil fuels than renewables and clean technologies. During the first six months of last year, Shell invested just 6.3 per cent of its then £17.1bn profits in low carbon energy projects, while investing almost three times more in oil and gas.

Greenpeace UK climate justice campaigner, Elena Polisano, accused Shell of "profiteering from climate destruction and immense human suffering".

"While Shell counts their record-breaking billions, people across the globe count the damage from the record-breaking droughts, heatwaves and floods this oil giant is fueling," she said. "This is the stark reality of climate injustice, and we must end it.

"World leaders have just set up a new fund to pay for the loss and damage caused by the climate crisis. Now they should force historical mega polluters like Shell to pay into it. It's time to make polluters pay. If they had pivoted their business and transitioned away from fossil fuels sooner, we wouldn't be in such a deep crisis. It's time for them to stop drilling and start paying."

Shell has long maintained that it is committed to delivering a transition to net zero emissions and is investing billions of dollars in clean technology projects, alongside its continued investments in oil and gas infrastructure.

* This article was originally published here