All must play their part in energy transition.
Sir, I welcome UK energy secretary Ed Davey’s comment that, when it comes to the energy industry, investors should “understand exactly what they’re investing in” (“Davey calls for tougher rules on fossil fuel asset ‘risks’”, December 12).
For our part, Shell has a clear responsibility to be transparent in our dealings with investors — and we are uncompromising in doing so. As a company which looks at decades-long investment horizons we are very aware of potential risks to our business and, in the case of climate change, have been transparent — some would say outspoken — in our discussion of solutions (including calling for the widespread introduction of carbon pricing).
We are highly experienced in understanding risk, as well as confident in our ability to adapt to changing times; as IHS Energy recently observed, companies such as Shell “have begun to hedge their long-term carbon risk by investing in new technologies, pricing carbon into project risk, and diversifying portfolios geographically and by resource type”.
We recognise, of course, that an energy transition is under way — and fully intend to play our part in it. More than half of our global production is cleaner-burning natural gas and we are helping to pioneer carbon capture and storage, in many people’s eyes a potentially game-changing technology.
But based on more than a century of playing a role in making and remaking the global energy system we also know that any transition is going to be difficult and will take time. It will also be complicated by the need to meet rising global energy demand which the International Energy Agency says could increase by more than a third by 2040.
Building a sustainable energy future is going to require a lot of effort by a lot of people. What we need is a pragmatic, collaborative, cross-sector approach to what is an enormously complex challenge. And for the common good — as well as for our shareholders — I am determined that Shell supports and facilitates that effort as best it can.
Ben van Beurden
Chief Executive, Royal Dutch Shell
The Hague, The Netherlands