Key Findings:

• Shell has made a significant effort to improve the amount, depth and frequency of information in its approach to the Energy Transition as well as in introducing an Energy Transition strategy.
• The company believes it is Paris-aligned. However, the lack of interim Scope 3 absolute targets, the length of time needed for low carbon activities to become substantial in the group, and the continuing activity in hydrocarbon exploration and new project sanctioning appear to be in contrast with full Paris-alignment.
• Shell’s Energy Transition Strategy contain, as one of its key pillars, the objective to diversify and grow in low and zero carbon activities. It is a laudable but complex objective to achieve, since currently only a minority of its activities matches such a description. Overall, the capex strategy that Shell is implementing for diversifying into low carbon activities makes strategic and financial sense, but there will be significant challenges in its implementation. We also observe that given the huge size of Shell’s hydrocarbon assets on the balance sheet, to convert Shell into a business able to cope well with the tectonic shift of the energy transition, will require a herculean effort for many, many years, and capital redeployment will need to be accelerated significantly.
• Shell’s current Energy Transition Strategy was decided under the previous CEO Ben van Beurden, who retired at the end of past year, after almost a decade at the helm. The new CEO, Wael Sawan, will need to decide if to maintain such a strategy or modify it.