Energy companies in transition: Oil multinationals forced to rethink

In view of the gradual move away from fossil fuels, the large oil companies are facing major challenges. How can you reposition yourself and get fit for a climate-neutral future?

In May, climate protection activists cheered in front of a regional court in The Hague, the Netherlands. That was just right, and Shell oil multinational suffered a setback. “The group must significantly reduce its emissions, by 45 percent by 2030,” explains energy expert Andreas Goldthau from the University of Erfurt. The judge’s verdict also had an impact on the behavior of investors. “That was one of the important signals for investors to say, ‘Now let’s take the next step’. And that is the driver for some investors to split this company up.”

Splitting instead of greenwashing

This is exactly what the New York hedge fund Third Point is now demanding: The oil giant Shell is to be broken down – into a “brown shell” with oil and Co. and a “green shell” with a focus on alternative energies. “From an ecological point of view, it makes sense to provide this clarity,” says Greenpeace financial expert Mauricio Vargas. “Because there are still far too many companies that put green energy in the shop window, but still make a lot of money with the old energies.” For Greenpeace it is important that companies “make themselves honest” and prevent so-called greenwashing.

Because if the climate laws get ever stricter, the share prices of the oil companies could come under pressure. Simply dust off the big oil dividends: This is a thing of the past for many investors. Also at the oil giant Exxon Mobil, the hedge fund engine No. 1 caused a lot of excitement. In concert with other investors, he filled three positions on the supervisory board with candidates progressively positioned on climate issues. Greenpeace expert Vargas believes that this should not be underestimated, because the supervisory board has a controlling function vis-à-vis the board of directors: “The capital owners have made it clear that climate protection is important to them. And if the board of directors does not also set an agenda, it will he has a very difficult time because the supervisory board has sent a clear signal to the management. “

Sovereign wealth funds are withdrawing from brown energy

So exerting influence with stocks is one thing. The other method: simply sell brown stocks, get out of coal and oil stocks. This was announced by the Norwegian State Fund, which in the 1990s was mainly fed with profits from oil transactions. The expert Goldthau calls this an extremely important signal. “This gives us one of the world’s leading pension funds that sends out a signal. And the signal is: Fossil fuels are not a safe investment.”

The Dutch pension fund ABP sees it that way – after all, the largest in the European Union. He too wants to get out of coal, oil and gas. The western oil multinationals have never been under as much pressure as they are now, with great risks for their business model. Many state-owned oil companies in the Gulf States, on the other hand, do not know of any critical shareholders. They want to extract the oil – as long as someone is still buying it from them.