In a move that has sent shockwaves through environmental circles, Shell has announced it's abandoning a key climate commitment just one year after posting record-breaking profits from its fossil fuel operations.
The energy behemoth revealed it's scrapping its target to reduce net carbon intensity by 45% by 2035, instead opting for a significantly watered-down ambition. This dramatic U-turn comes despite the company reporting an astonishing $28.2 billion (£22.3 billion) in annual profits for 2023.
Leadership Defends Strategic Shift
Under CEO Wael Sawan, who assumed leadership last year, Shell has been aggressively pivoting back toward its traditional oil and gas roots. The company justified its decision by pointing to "strong confidence in the strength and longevity of oil and gas demand."
Shell's revised climate strategy now aims for a 15-20% reduction in net carbon intensity by 2030, compared to the previous 20% target. More controversially, the company has completely eliminated its 2035 target while maintaining a distant net-zero ambition for 2050.
Environmental Backlash Intensifies
Climate activists have reacted with fury to Shell's announcement. Jonathan Noronha-Gant from Global Witness didn't mince words: "Shell's backtracking on its climate commitments shows they've abandoned any pretence of environmental leadership. This is a company prioritising shareholder payouts over planetary survival."
The timing couldn't be more contentious. As Shell scales back climate efforts, it's simultaneously rewarding shareholders with $23 billion in payouts and share buybacks throughout 2023, representing over 80% of its entire annual profit.
Industry-Wide Trend Emerges
Shell isn't alone in this strategic retreat. BP has similarly weakened its climate targets, reducing its ambition to cut oil and gas production by 2030 from 40% to just 25%. This pattern suggests a broader industry shift away from aggressive climate action despite mounting scientific evidence about the urgency of the climate crisis.
As Shell continues to generate massive revenues from fossil fuels—with gas trading performing particularly strongly in late 2023—critics argue the company's latest move demonstrates that voluntary climate commitments are insufficient to drive meaningful change in the energy sector.
