Shell reveals better-than-forecast earnings amid pressure over climate goals

Shell has unveiled further returns for shareholders after better-than-expected earnings as the oil giant faces mounting investor pressure over its actions to tackle climate change.

The group reported underlying earnings of 7.7 billion US dollars (£6.1 billion) for the first three months of 2024, down from 9.6 billion US dollars (£7.7 billion) a year earlier.

But the result was better than forecast and 6% higher than earnings in the previous quarter.

The FTSE 100 firm announced another 3.5 billion US dollars (£2.8 billion) in share buybacks for the second quarter, on top of the 3.5 billion US dollars (£2.8 billion) completed in the final three months of 2023.

The figures come ahead of what is expected to be a bruising annual general meeting on May 21, with a group of major investors in Shell calling for the group to take further action on emissions and climate change.

The investors – led by activist shareholder Follow This and including the likes of Amundi and Axa Investment Managers – have filed a resolution ahead of the AGM urging the company to align its greenhouse gas emissions targets with the Paris Agreement.

In a letter to shareholders on Thursday, they asked other investors to back the resolution and send a “strong signal” to the industry.

Sinead Gorman, Shell’s chief financial officer, said the group is “looking forward to the annual general meeting in terms of our ability to engage with shareholders”.

She said: “We have been very pleased with the rollout of our energy transition strategy.”

She insisted that, having held discussions, many of Shell’s investors are “seeing it as a company with one strategy”.

“We’re hoping that it plays out well and look forward to the support of our shareholders at the AGM.”

There was also a backlash over Shell’s climate change efforts after its results showed another bumper quarter for earnings and shareholder returns.

The Institute for Public Policy Research (IPPR) think tank said the figures showed just 438 million US dollars (£329 million) was spent on renewables in the first quarter.

IPPR associate director George Dibb said: “It is crystal clear that, left to its own devices, Shell can’t be trusted to drive the green transition.”

But Shell said its total spend on lower carbon solutions across the group as a whole is far higher, reaching 5.6 billion US dollars (£4.5 billion) last year.

Greenpeace stepped up its calls for a “climate damages tax” on fossil fuel firms after Shell’s figures.

Charlie Kronick, senior climate adviser at Greenpeace UK, said: “On a day where climate leaders are negotiating in Abu Dhabi how to help the world’s poorest meet the skyrocketing costs of climate loss and damage, Shell continues to bank billions from flogging the fuels that are driving the crisis.

“With countries experiencing the worst impacts of climate change among those least responsible for it, the case for making polluters pay for the damage their industry is causing could not be clearer.”

Shell’s shares lifted 1.5% on Thursday morning, with the group’s latest share buybacks seeing it return more than 10 billion US dollars (£8 billion) to investors in the first half.

Shell chief executive Wael Sawan said: “Shell delivered another quarter of strong operational and financial performance, demonstrating our continued focus on delivering more value with less emissions.

“We continue to deliver on our Capital Markets Day targets, giving us the confidence to commence another 3.5 billion US dollar buyback programme for the next three months.”