Shell Is the Greenest Big Oil Company. Look What That Got It. By James Mackintosh | October 31, 2021 Topics: Corporate Social Responsibility, ESG Summary: Royal Dutch Shell shows much that is wrong with environmental, social and governance (ESG) investing. It was the first big oil company to target reduced carbon emissions, has gone further to shift away from fossil fuels and is closest to meeting the Paris carbon target. The result? Shell has a low market valuation, is shunned by big money managers who reject oil outright and now faces falls calls to split into two: a "green" business for ESG investment and a "brown" oil operations business for investors who just want a fat dividend. Classroom Application: The class should debate the merits of Shell splitting into two. The (debatable) argument of hedge fund Third Point is that splitting is better for the environment because the new dirty business would have a higher cost of capital, visible as a lower valuation, and so should invest less in production. For more on this, see: https://www.wsj.com/articles/third-point-has-big-shell-stake-urges-energy-giant-to-break-up-11635349151 Questions: What has Royal Dutch Shell done to satisfy environmental, social and governance (ESG) investors? Has it done more or less than other large companies? Why is Shell not being rewarded by the stock market? What seems to be wrong with environmental, social and governance (ESG) investing? What are the arguments for Shell to split into a brown and a green company? What are the pros? What are the cons? Based on the article, would you advise Shell to spit into two separate companies? Why or why not? How likely is it that Shell will actually act as you advise? Shell Is the Greenest Big Oil Company. Look What That Got It. - WSJ.pdf

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Shell Is the Greenest Big Oil Company. Look What That Got It. - WSJ.pdf