Shell CEO Ben van Beurden. Photo by
F Lodge / Alamy Stock Photo
Ben van Beurden, the CEO of Shell, wants you to do your bit to solve climate change.In early June, he told an audience of corporate bosses in London that we should eat fruit in season and recycle more.“I have three daughters, they are all quite fashion conscious,” he explained. “I like to point out to them, having something new for every season four times a year is creating quite a significant ecological footprint, have you realised that? Because they are all about climate change.”
I wonder what the Van Beurden children think of having a dad who’s happy to cite climate change when one of them wants a new jacket, but puts it to the back of his mind when the company he runs secures new oil projects worth billions.To make sense of what’s going on here, you first need to understand what motivates companies like Shell.Capitalism didn’t always look like it does today. After World War II, the US and western Europe experienced an astonishing economic boom that transformed the lives of millions, expanded opportunity and saw workers take home ever increasing pay packets.Democratic presidential candidate Elizabeth Warren has written about how, caught up in the free-market fervour of the 80s, major US corporations decided to change all that. In 1981, the Business Roundtable – a group that represents large American firms – said that companies “have a responsibility, first of all, to make available to the public quality goods and services at fair prices, thereby earning a profit that attracts investment to continue and enhance the enterprise, provide jobs, and build the economy.” By 1997, the Roundtable declared that the “principal objective of a business enterprise is to generate economic returns to its owners.”This change, from emphasising “public good” to believing that their only mission was to maximise return for shareholders, led to bosses taking more and more profit for themselves, rather than investing in their workforce. Since the 1980s, wages in the US have barely moved even as productivity has increased. The salary gap between ordinary workers and executives has shot up.
In 2018, Van Beurden saw his pay double to £17.2 million – that’s 143 times higher than the average Shell employee in the UK.How do you get to a point where a company may know that its actions jeopardise the future of the planet and carry on regardless? By having a system that prioritises generating profit over everything else.It’s understanding this point that allows us to make sense of a world where companies and bosses constantly say one thing and do the opposite.A world where BP can talk about working toward "energy that’s cleaner and better" in its new multimillion dollar ad campaign while opening up protected areas of Alaska to oil drilling.A world where ExxonMobil can claim to be committed to the Paris climate agreement while also looking to imperil it by aggressively increasing oil and gas output.It’s that system that enabled Van Beurden to downplay the rise of electric vehicles in July 2017 and state that the transition away from the internal combustion engine would “take place over generations”; only for him to boast less than a month later about his plans to buy a new electric car.When profit is prioritised above everything else, companies can justify pretty heinous things.I once interviewed the outgoing COO of Nestle, José Lopez, and asked him why the company still had child labour in its supply chain, when it had promised for years to address the issue.What struck me was that for all the Lopez’s talk about his efforts to increase transparency and monitoring, Nestle was handicapped by its inability to even consider limiting profit so it could address the issue. The idea of a multibillion-dollar business taking a small hit – just so it could build some schools and properly invest in cocoa-growing communities in Ivory Coast – was unfathomable. Companies like Nestle have to make ever-increasing profits in order to exist. In June, the Washington Post reported that Nestle still uses child labour to make its chocolate.
To tackle climate change and prevent the collapse of human civilisation, the biggest polluters in the world will need to take a hit – a small dent in their profits as we transition from fossil fuels to renewable energy sources.As long as our economic system prioritises profit over public good, big oil’s rhetoric on tackling climate change will be empty.Van Beurden told the New York Times in 2016 about how he had once come home to find one of his children crying inconsolably. He thought at first that it was because he was going out with his wife that evening, but he soon learned that she was upset because she had been learning about climate change at school.To calm her down he told her global warming would be solved, said that he would play a key role in addressing it, and asked her if she trusted him.“She said, ‘Of course, I trust you,’” Van Beurden recounted, adding, “and in that sense she is different from the rest of society.”Joe Sandler Clarke is a reporter with Unearthed.@jsandlerclarke