Written By Introduction
Sustainable investing is no longer just a buzzword, it’s a growing trend that’s impacting the entire investment landscape. As more investors prioritize environmental, social and governance (ESG) factors in their decision-making process, companies are under increasing pressure to align with these values. We had the pleasure of speaking with Shell’s CFO about how they’re navigating this shift towards sustainable investing, and what insights he has to share about shareholder priorities. In this blog post, we’ll dive into his perspectives on why sustainability matters for investors and how Shell is responding to this new reality. Get ready for an eye-opening discussion on the future of finance!
The Role of Sustainable Investing in Shell’s Corporate Strategy
Shell’s Corporate Strategy
The role of sustainable investing in Shell’s corporate strategy was discussed by CFO Kurt Jooste. He highlighted that the company is committed to using its capital for the benefit of society as a whole. This goes beyond traditional financial metrics, such as return on investment and shareholder value. Shell defines “sustainable” as meeting people’s needs without damaging the environment or undermining future generations’ ability to meet their own needs. The company has developed a set of principles called “2030 Vision” to help it make these decisions.
When making investments, Shell looks at both short-term and long-term factors. The short-term focus includes assessing risks and opportunities today, while taking into account longer-term trends and global market conditions. However, the ultimate goal is always to improve lives and protect the environment.
One way Shell is achieving this is through its investment in renewable energy. In 2017, it became the first major oil company to publicly commit to powering its global operations with 100% renewable energy by 2050. This represents an ambition not only for Shell, but for the industry as a whole: according to Bloomberg New Energy Finance, renewables will account for 43% of global electricity generation by 2050.
Shell is also investing in carbon capture and storage (CCS), which aims to reduce greenhouse gas emissions from industrial processes. By permanently storing CO2 underground, CCS could help prevent climate change from reaching dangerous levels.
The shift towards sustainable
Shareholder Priorities and Sustainability
In order to support shareholder interests, companies must assess their sustainability performance and prioritize actions that can improve it. In 2013, Shell created a sustainability report card for its subsidiaries to help identify areas where improvements could be made. In this interview with CFO Ben van Beurden, we learn about the company’s priorities and how they align with shareholder interests.
Van Beurden notes that improving corporate governance is key to sustainable investing: “It is important that we are able to identify and take action on the issues early so that they do not become entrenched in the organisation.” He also stresses the importance of communicating effectively with stakeholders: “We need to make sure our communication messages resonate with our customers, investors and employees. We have found that transparency is a critical element of building trust.”
Overall, Van Beurden believes that shareholders should focus on three key areas when assessing sustainability performance: environmental impact, social responsibility and financial performance. By taking a holistic approach, companies can more effectively address shareholder concerns while continuing to grow their businesses.
Conclusion
As the world starts to understand that climate change is a major global issue and that we need to start investing in cleaner energy sources, companies like Shell are leading the way by embracing sustainability as a core value. In his latest shareholder presentation, CFO Ben van Beurden outlined some of the company’s key priorities around sustainable investment, highlighting areas like reducing environmental impact and improving operational efficiency. This shift towards sustainability is important not only for companies’ bottom lines but also for their communities, which will be increasingly affected by climate change.
