Shell’s investments in renewable energy fell to only 8% of the oil supermajor’s overall spending budget in the latest quarter after the company watered down its carbon emissions targets in March.
Its financial results for July to September revealed that Shell spent $409m (£315m) in its renewables and energy solutions business, from an overall capital expenditure of almost $5bn.
Mark van Baal, the founder of the activist shareholder group Follow This, said the focus on fossil fuels “jeopardises the future of the company”.
The FTSE 100 oil company made better than expected profits of $6bn in the third quarter despite weaker oil market prices by selling more gas.
Shell’s adjusted earnings for the period slipped from $6.2bn in the same months last year but the profit was still higher than the $5.36bn predicted by industry analysts.
It announced it would buy another $3.5bn of shares from investors – the 12th consecutive quarter it has showered its investors with over $3bn in buybacks. Last year it distributed $23bn to investors, more than 42% of its cashflow from operations.
Wael Sawan, Shell’s chief executive, said the company’s “strong results” showed it was continuing to “deliver more value with less emissions”.
Shell has set out plans to grow its gas production over the coming years, in the face of warnings from climate experts that new oil and gas projects are not compatible with limiting global heating to within 2C of preindustrial levels.
The gas business was the largest contributor to better than expected profits after it reported quarterly earnings of $2.9bn, up from $2.5bn in the same months last year.
“Shell delivered another set of strong results,” Sawan said. “We continue to deliver more value with less emissions, while enhancing the resilience of our balance sheet.”
Sawan is preparing to slash up to $3bn in costs from the company by the end of next year by cutting hundreds of jobs from Shell’s oil and gas exploration business. The jobs cuts, first reported by Reuters in the summer, are expected to have the biggest impact on Shell’s offices in Houston and The Hague, with a lesser impact on its UK operations.
after newsletter promotion
The company confirmed plans earlier this year to cut hundreds of jobs from its low-carbon solutions division, as part of the cost-cutting campaign spearheaded by Sawan shortly after he stepped into the top job in January last year.
The plans provoked outrage from climate campaigners and Shell’s employees, with two members of staff writing a rare open letter urging Sawan not to scale back investments in renewable energy.
Aakash Naik, a campaigner at Greenpeace UK, said: “In just the last three months, Shell banked over £4bn and are promising even more to shareholders in buybacks. In the same period, hurricanes and storms supercharged by the burning of fossil fuels have killed thousands, displaced millions and caused billions in damage around the world. The disconnect is startling.
“Upcoming international climate talks are an opportunity to right this brazen injustice: it’s time for leaders to take bold action to force the industry to stop drilling and pay up for the immense harm it is doing to people and planet.”
Shell was contacted for comment.