Shell only changes with fundamental intervention

The need to change should not be prompted by a legal slap on the wrist, but by the autonomous need to become a different company, argues Micha Schipper in his opinion piece.

Shell has its own responsibility in the fight against global warming, the court in The Hague said. The company’s CO2 emissions should be almost halved by 2030. According to Shell CEO Van Beurden, the verdict does not mean a change, but rather an acceleration of the strategy. Van Beurden, who is appealing, rightly argues that a court decision is not the way to reduce the CO2 emissions of the group – or its customers. But what the Shell veteran does not mention is what is needed to successfully and structurally change Shell: a fundamental intervention in the corporate culture.

Shell seemed to be changing for the better in recent years. The company emphasized standards and values and presented itself as an organization where the climate comes first and themes such as diversity and human rights have high priority. Indeed, a new culture seemed to emerge at the more than 100-year-old company. Shell opted for (product) innovation with a focus on sustainability and no longer seemed part of the problem, but part of the solution. Unfortunately it turned out to be too idyllic a sketch of reality.

“The need for fundamental change should not be prompted by a legal slap on the wrist, but by the autonomous need to become a different company.”
The reality is that a true culture transformation and impactful innovations occur in individuals and teams who are allowed to work in a culture of diversity, experiment, guts, curiosity and risk. Such a culture has not existed at Shell for decades. There is a clear bottleneck: the current Shell summit. It is clear that a progressive and innovative culture is not going to happen if it has to be initiated and supported by the same people who 20 years ago had no problem working for one of the most polluting companies in the world.

Thousands of companies now have as their primary goal to make a positive contribution to the energy transition and climate change. In the current war for talent, these are parties that attract the right people: people who bring knowledge and expertise from the genuine need to contribute to a better world. Shell is not such a company.

The need for fundamental change should not be prompted by a legal slap on the wrist, but by the autonomous need to become a different company. Unfortunately, Shell is not showing any serious signs of this yet. Illustrative of this is Van Beurden’s statement that the energy transition is too great a challenge to tackle as one company. But nobody asks that, right? The question is whether Shell wants to change. Hopefully that will happen under pressure from major shareholders. Or at the initiative of a new top.

Source: FD

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