Ben van Beurden sat stony faced as climate activists sang “We will, we will stop you” to the tune of Queen’s We Will Rock You. If Wael Sawan was following the scenes at May’s Shell annual shareholder meeting in London, he will understand the scale of the task ahead when he takes over the top job at Europe’s largest energy company in January.
Sawan will have to tread a path Van Beurden has struggled to navigate, trying to stave off criticism from investors who want him to push further into fossil fuels, and investors and environmental campaigners who call for a bigger green energy drive. Last month it was reported Shell had invested equivalent to 6.3% of its £17.1bn profits into low carbon energy in the first half of the year, investing nearly three times more in oil and gas.
Shell’s image problem hasn’t been helped by the awkward juxtaposition of posting bumper profits as a result of an energy crisis which has left millions facing fuel poverty.
Van Beurden has navigated choppy waters at Shell, including plunges in the oil price, the Covid pandemic and the current gas shortages, which he has predicted could last for several winters. His decision to cut the dividend in 2020 was seismic, the first time the payout had been cut since the second world war.
The Dutchman has made plenty of front foot moves too: leading the £47bn takeover of BG Group in 2015 – one of the biggest ever acquisitions by a British company, which has allowed Shell to benefit from the current gas squeeze – and relocated Shell’s headquarters to London. Van Beurden has also addressed the company’s huge debts through sell-offs of less profitable or productive assets – Shell has made $80bn in divestments over the past decade. He signs off with the company reporting record profits and has received more than £70m in pay and bonuses since taking the job in 2014.
In 2020, Van Beurden set out a plan to be a net zero emissions energy business by 2050. However, he has faced pressure to be more ambitious and Sawan has already been urged to take a firmer approach on renewable energy.
Sawan is a dual Lebanese-Canadian national born in Beirut. The married father-of-three grew up in Dubai and studied at Harvard Business School. He graduated with a master’s degree in chemical engineering from Canada’s McGill University.
He now lives in The Hague, where Shell was headquartered, but plans to move to London when he takes over. Sawan, 48, joined the oil company in 1997 and has been a member of its executive committee since 2019. He has run several divisions including Qatari oil and gas projects, its deepwater business based in Houston and its upstream arm. Last year, he was appointed head of its integrated gas and renewables business, a move which was seen as a sign he could be in line for the top job.
Campaigners harbour hopes that his experience may be a nod to a more radical shift in strategy. “While there is a small chance Wael Sawan’s background in renewables could signal a change in direction. His tenure would have to see a major turnaround by ending new oil and gas expansion to put Shell on track to meet what scientists say is needed to avert climate breakdown,” says Rachel Kennerley, international climate campaigner at Friends of the Earth. Shell lost a landmark ruling in the Dutch courts last year, when a judge ordered it to cut its global carbon emissions by 45% by the end of 2030 compared with 2019 levels after a case brought by Friends of the Earth.
Activist investor Follow This, which has been pushing Shell and its shareholders to commit to tougher climate goals, says Sawan could still be in post by that date if he emulates Van Beurden’s lengthy tenure. “He has to make bold decisions to explore new business models instead of new oil and gas. If he fails to deliver deep emissions cuts, he puts the company at great financial risk,” says Follow This founder, Mark van Baal. “Perhaps the greatest financial risk comes from litigation. Oil, coal and gas companies will be held liable for the staggering costs of devastating climate change.”
Charlie Kronick, climate campaigner for Greenpeace UK, says of Sawan: “He must state that Shell will massively shift capital expenditure to renewable energy in the short term. Without those clear commitments, Shell will continue to make the climate emergency even worse and remain part of the problem, not part of the solution.”
In the City, the mood appears more sanguine – perhaps unsurprising given nearly $30bn of returns are expected to be handed to shareholders this year. AJ Bell investment director, Russ Mould, notes that Shell’s share price has returned to pre-pandemic levels, “illustrating how he has steadied the ship and now seems as good a time as any to pass the baton to a new leader”. RBC analyst Biraj Borkhataria says: “We believe Wael is well respected by the investor community and the shift is likely to be more of a continuation than revolution of the strategy put in place by Van Beurden.”
