Shell PLC (LSE:SHEL, NYSE:SHEL, EURONEXT:SHELL), BP PLC (LSE:BP.) and other oil majors are “greenwashing” and not making the transition to clean energy they suggest, according to a new academic study.
The companies freely used terms such as “climate”, “low-carbon” and “transition”, BP and Shell especially, but an increasing tendency to push decarbonization and clean energy strategies are “pledges rather than concrete actions”, the report in the PLOS journal said.
Financial analysis by the authors, Mei Li, Gregory Trencher and Jusen Asuka, reveals the business model of the FTSE 100 pair, Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM), continues to depend on fossil fuels along with “insignificant and opaque spending on clean energy”.
The study, which used data collected between 2009 and 2020, concluded that “the transition to clean energy business models is not occurring, since the magnitude of investments and actions does not match discourse”.
“Until actions and investment behaviour are brought into alignment with discourse, accusations of greenwashing appear well-founded.”
Given that the energy products of these companies have contributed significantly to global greenhouse gas emissions and planetary warming over the past century, the authors stressed the importance of their role, as decarbonising the global economy over coming years to avoid dangerous climate change cannot occur without a profound transformation of their fossil fuel-based business models.
In their latest results, Shell revealed nearly US$55bn of cash generated in 2021 thanks to rising oil prices, while BP generated US$6.1bn of cash and set out to "sustain earnings from resilient hydrocarbons out to 2030".