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THE SUNDAY TIMES: You can be sure of Shell, if you dare

Thanks to Greta Thunberg — who last week took her campaign to business leaders gathered in Davos for the annual World Economic Forum — the climate-change debate should have reached every boardroom.

The implications are greatest in the oil and gas sector, which is wrangling with the imminent shift to low-carbon businesses.

“There are some investors who would be concerned that the capital being deployed in low-carbon businesses will not earn returns that would be as good as in the base businesses of these companies,” says Jason Gammel at Jefferies.

“The countervailing argument would be that if one is concerned about the demand for oil and gas over the longer term, these would be businesses that would be viewed as sustainable, and so their terminal value at the end of five or ten years could actually be higher.”

The debate is raging over which of those outcomes will prevail. Shell, run by Ben van Beurden, is one old player that gets credit for trying to adopt new thinking.

It has pledged to spend up to $2bn (£1.5bn) a year on greener energy — a sizable sum, until you put it into the context of Shell’s annual capital expenditure budget of $25bn to $30bn.

Russ Mould at AJ Bell points out that one of the reasons why Shell’s shares have lagged behind both the oil price and the FTSE 100 over the past 12 months is the “pushback against fossil fuels” among fund managers.

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