Shell CEO Comes Under Pressure from Within on Renewables Shift

CEO Wael Sawan has come under pressure from within the company after two employees issued an open letter urging him not to scale back investments in renewable energy, Reuters reported Wednesday.

The letter, which has garnered significant attention within the organisation, raises questions about Shell's commitment to being a leader in the global energy transition. 

At an investor day in June, Sawan unveiled plans to scale back investments in renewables and low-carbon ventures as part of an overarching strategy to enhance financial returns. This move was accompanied by the restructuring of the low-carbon business and the elimination of the role of the global head of renewables. Thomas Brostrom, the previous holder of that position, promptly departed after less than two years in the role. 

In the open letter, the employees, Lisette de Heiden and Wouter Drinkwaard, who both work in Shell's low-carbon division, expressed their concern about these developments. According to Reuters, the letter, which was addressed to Sawan and the Shell executive committee, stated, "For a long time, it has been Shell's ambition to be a leader in the energy transition. It is the reason we work here... We can only hope the optics of the CMD announcements are deceiving us and that Shell continues its path as a leader in the energy transition." 

The letter has gained substantial traction within the company, with more than 80,000 views and 1,000 likes, sparking a vigorous exchange of comments on the internal platform, including Sawan's response.  

Sawan agreed on the complications surrounding the energy transition."For an organisation at the crux of the energy transition, there are no easy answers and no shortage of dilemmas or challenge... I am proud of how we provide affordable and secure energy to people every day, while we work hard to provide lower-carbon solutions to our customers, as we transition over time to a net-zero emissions business," Reuters noted in his answer to the letter. 

Sawan, who assumed his role in January, has emphasised on improving Shell's operational performance and profitability by focusing more on traditional oil and gas operations, biofuels, and electric vehicle charging. This shift has seen Shell exit offshore wind projects in Ireland and France, divest its UK power retail business, and explore selling stakes in renewable projects in India. The possibility of selling all or part of the Sonnen battery storage company, acquired in 2019, is also under consideration. 

Reuters cited Shell's spokesperson who expressed admiration for their staff's engagement and passion for both the energy transition and the company. They stated that Shell is playing a significant role in addressing the energy transition. Additionally, during the recent Capital Markets Day, they outlined the areas within the current and future energy system where Shell is best positioned to invest, compete, and succeed. 

Amidst the strategic shift, several senior executives have left the low-carbon and renewables division, including Oliver Bishop, Roberto Jimenez, and Colin Crooks. Oliver Bishop, who previously led Shell's global hydrogen mobility business, has joined BP in a similar role. 

September 28, 2023