There it goes! Shell wins the sustainability race! Not true, writes economist Mathijs Bouman, and green investors should steer clear.
It was ahead in the race, miles ahead. The ‘Shell Solar Speeder’ was by far the fastest car in this year’s World Solar Challenge, the annual race for solar powered cars between Darwin in the north of Australia and Adelaide in the south. The roof of this aerodynamic racing car was fitted with revolutionary solar cells made at the world renowned Shell Renewable Energy Lab at Energy Valley in Groningen. They’re efficient, thinner and cheaper to produce than anything the competition has come up with.
A unique international team of students and researchers at the Shell Solar Academy in The Hague – the company’s new flagship project – used the cells to build the Speeder which was flying way past the TU Delft’s Nuon Solar Team and TU Twente’s Team Twente. It also left Japanese and American challengers standing.
This is all nonsense, of course. There is no such thing as a Shell Solar Speeder and it never went to Adelaide. There is no Solar Academy in The Hague. And Shell is no part of Energy Valley (a foundation which promotes the use of clean energy in the north of the country).
For Shell, energy comes through a pipeline, or not at all. Oil and gas, that’s Shell’s business. Solar energy is something other companies do. Still and all, Shell thinks it’s doing its bit to reduce CO2 emissions and combat climate change. In order to get rid of coal and oil the world needs to switch to gas. That will bring down C02 in one fell swoop. Shell is investing in gas and that means Shell is sustainable.
The country’s biggest investor agrees completely. Pension fund ABP and investor APG are going to invest sustainably. The portfolio needs to be greener, ABP announced last week. It’s not a bad idea in itself but when I asked ABP boss Corien Wortmann if that meant Royal Dutch Shell would be out of bounds, she said Shell’s investment in gas made it part of the energy transition process. And that is something ABP will happily invest in.
Even if the road to CO2 neutral energy goes via gas, Shell can only be part of the energy transition process if it puts large amounts of money into the research and development of sustainable alternatives, not in order to be able to stop producing oil and gas in the next few years but to do it as soon as is realistically possible. Without that vision Shell’s story is just so much waffle. That is why it has no place in the ABP’s sustainable portfolio.
Mathijs Bouman is an economist.
This article appeared earlier in the Financieele Dagblad