Shell Plc (LON: SHEL) chief executive officer Wael Sawan told the company’s staff that he “believes in urgent climate action,” despite shifting focus toward its core oil and gas businesses.
- Shell is refocusing on its core oil and gas business in an effort to improve returns to investors.
- Sawan said that the challenge in the transition to cleaner energy sources is affordability.
- It comes as Shell’s share price rallies driven by higher commodity prices and the renewed focus on fossil fuels.
The challenge in the transition to cleaner energy sources is affordability, Sawan said in an internal townhall meeting on Tuesday, according to people who attended.
Under Sawan, who took the top job in January, Shell is refocusing on its core oil and gas business in an effort to improve returns to investors.
Shell confirmed that Sawan spoke in a company townhall today.
He told staff that the company’s strategy hadn’t changed, but that the way it is delivered has.
The shift toward fossil fuels is causing anxiety among some Shell employees in the clean-energy division, but has been welcomed by many investors. The company’s shares hit a record high on Monday.
“This is the shareholders’ money,” Sawan said in the townhall.
“We need to earn the right to spend this.”
Shell encouraged employees to share questions and comments on an internal forum ahead of the gathering.
Shell shares hit record high
Shares of the company rose as high as 2,758 pence in London on Monday, marking a threefold increase from the pandemic-era low of 878.3 pence three years ago.
The rally in Shell shares has been driven by higher commodity prices, particularly for natural gas in Europe, “and the strategic changes announced by the new CEO in June, which is likely drawing in more investors,” said Morningstar analyst Allen Good.
However, Good points to “currency issues” as also being part of Shell’s rise. “US dollar-based shares remain below their highs, so part of the move is lower pound and euro.”