Shell CEO Faces Internal Pressure to Stay the Course on Renewables
Posted 27/09/2023 13:31
The CEO of Shell, Wael Sawan, is encountering resistance within the company regarding his strategy to reduce investments in renewable energy. Two Shell employees issued an open letter, a rare occurrence within the energy giant, expressing their concerns about Shell's plan to scale back investments in renewables and low-carbon businesses.
The letter, posted on Shell's internal platform and seen by Reuters, challenges Sawan's strategy. In June, Sawan had outlined plans to slow down investments in renewables as part of an effort to increase returns. Shell had also split its low-carbon business and eliminated the role of the global head of renewables, leading to the departure of Thomas Brostrom, who held that position for less than two years.
The open letter, signed by Lisette de Heiden and Wouter Drinkwaard, employees in Shell's low-carbon division, emphasized Shell's ambition to lead in the energy transition. It expressed concerns about recent announcements and hoped that Shell would continue to be a leader in the energy transition.
The letter generated significant attention within the company, receiving over 80,000 views and 1,000 likes and sparking a robust exchange of comments on the internal platform, including responses from Sawan himself.
Sawan responded to the concerns, acknowledging that the energy transition posed challenges and dilemmas but emphasizing Shell's commitment to providing lower-carbon solutions while maintaining a secure and affordable energy supply.
Since taking office in January, Sawan has prioritized improving Shell's operational performance and profitability, focusing on oil and gas operations, biofuels, and electric vehicle charging. As part of this strategy, Shell has exited offshore wind projects, sold its UK power retail business, and considered selling stakes in renewable projects in India. There are also discussions about selling part or all of Sonnen, a battery storage company acquired by Shell in 2019.
Shell aims to become a net-zero emissions company by 2050. While Sawan's strategy emphasizes traditional energy sources, it appears to have generated internal dissent from employees passionate about Shell's role in the energy transition.
A Shell spokesperson stated that the company appreciates its staff's engagement and passion for both the energy transition and Shell, emphasizing Shell's meaningful role in addressing the energy transition. The company recently outlined its areas of focus in the energy system to invest in, compete, and win.
Several senior executives from Shell's low-carbon and renewables division have left the company since the shift in strategy, further indicating internal tensions over the company's direction.