London, September 27th- Shell CEO Wael Sawan is facing mounting pressure from within the company over his strategy, as two employees have issued a rare open letter urging him not to scale back investments in renewable energy. This internal debate comes after Sawan outlined plans to slow investment in renewables and low-carbon businesses as part of a broader strategy to enhance returns.
The open letter, posted earlier this month on Shell’s internal web platform expressed concerns about recent changes in the company’s approach to renewable energy. Sawan’s strategy included splitting the low-carbon business and eliminating the role of global head of renewables, which led to the departure of Thomas Brostrom, the former holder of that position, after just less than two years.
In the open letter, signed by Lisette de Heiden and Wouter Drinkwaard, both employees in Shell’s low-carbon division, they emphasized on the company’s historical ambition to lead the energy transition. They wrote, “For a long time, it has been Shell’s ambition to be a leader in the energy transition. It is the reason we work here. The recent announcements at and after the capital markets day deeply concern us… We can only hope that the optics of the CMD announcements are deceiving us and that Shell continues its path as a leader in the energy transition.”
The letter garnered significant attention within the company, receiving more than 80,000 views and 1,000 likes, sparking a lively exchange of comments on the company’s internal platform, including responses from CEO Wael Sawan.
Sawan acknowledged the complexity of the energy transition and the challenges Shell faces, stating in his response, “For an organization at the crux of the energy transition, there are no easy answers and no shortage of dilemmas or challenges. We might not always agree on the way forward, but I feel good about the role Shell is, and will continue, to play.”
Since assuming office in January, Sawan has focused on improving Shell’s operational performance and profitability by emphasizing oil and gas operations, biofuels, and electric vehicle charging. The company has recently divested from offshore wind projects in Ireland and France, sold its UK power retail business, and expressed intentions to sell stakes in renewable projects in India.
The company is also considering the sale of all or part of the Sonnen battery storage company it acquired in 2019, according to industry sources. However, Shell declined to comment on the Sonnen sale process.
A Shell spokesperson commented on the situation, saying, “We appreciate that our staff are engaged in and have passion for both the energy transition and Shell… Shell is playing a meaningful role in addressing the energy transition, and at our recent Capital Markets Day, we set out those areas of the energy system of today and tomorrow where we are best placed to invest, compete, and win.”
Notably, several senior executives have departed from the low-carbon and renewables division since the strategy change, including Oliver Bishop, who joined BP in a similar role, and Roberto Jimenez, who led Shell’s European onshore power division.
Colin Crooks, senior vice president of renewables and energy solutions Europe, is also set to leave at the end of the month, according to a company spokesperson. Despite the internal debate, the company maintains its commitment to becoming a net-zero emissions company by 2050.
As the energy industry grapples with the transition towards sustainability, the internal tension at Shell highlights the challenges faced by the major energy companies in balancing their traditional fossil fuel businesses with investments in renewable energy and low carbon technologies. Sawan’s leadership will be closely scrutinized as the company navigates this complex transition.