Beyond Divestment

Abstract

The top 20 shareholders in both BP and Shell have increased their total number of shares by three quarters of a billion in BP, and half a billion in Shell since the Paris Agreement was signed in 2015. Indeed, although 47% of BP shareholders and 54% of Shell shareholders have reduced their stake, net share ownership overall has risen significantly in both companies. The analysis in this report explores deeper contradictions that are revealed in those patterns of investment and divestment. First, any trend towards divestment amongst the shareholders who have reduced their shareholding is being offset by the largest shareholders. Second, what might look like divestment cannot always be read as such; more than a quarter of the 20 investors who made the most significant reductions in shareholdings in either BP or Shell increased their overall fossil fuel investment. Third, the group of shareholders that has fully divested is relatively insignificant: only 60 institutional investors have sold all of their shares in the two oil firms. This represents 3% of BP and 4% of Shell shareholders. Those trends tells us that on one hand that trends which appear to indicate divestment are actually part of a more speculative commercial strategy rather than a recognition of the need to divert investment from away from fossil fuels. On the other hand they indicate that divestment campaigns are not having the necessary impact. If shareholder divestment is not working fast enough – the paper concludes - then we need to pursue other forms of intervention that drastically scale back oil and gas production.

Keywords: Fossil fuels, divestment, investment, BP, Shell, shareholders, climate change