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By Chloe Farand and Sharon Kelly • Monday, August 20, 2018 – 17:29
It took oil company Shell more than 16 years to directly warn its shareholders that climate policy posed a financial risk to the company’s business model despite knowing — in private and for decades — about the relationship between its products and climate change.
Shell started commissioning confidential work about the impact of burning fossil fuels on the global climate as early as 1981. However, analysis by DeSmog UK and DeSmog found that Shell did not start mentioning the possibility of climate change to shareholders in annual reports before 1991 — 10 years after the company started a research stream to study climate change.
Analysis of Shell’s annual reports and financial records at the time show the company did not give a clear warning to its shareholders about the financial risks “related to the impact of climate change” and attached to their investments until 2004.
DeSmog UK and DeSmog have worked through Shell companies’ annual reports submitted to the UK’s Companies House and 10-K’s and 20-F forms filed under the U.S. Securities and Exchange Commission (SEC) throughout the 1990s and early 2000s to compare what the company knew in private at the end of the 1980s and what it told its shareholders about the environmental and financial risks attached to their investment during the following decade.
What Shell knew about climate change at the end of the 1980s is well-established and revealed in a confidential report commissioned by and for Shell called “The Greenhouse Effect”.
The report was dated 1988 and made public for the first time this year after being uncovered by Jelmer Mommers of De Correspondent and published on Climate Files. It reveals the company’s examination of climate change had already been ongoing for at least seven years.
The 87-page report warned Shell that its own products were responsible for global warming and that “there is reasonable scientific agreement that increased levels of greenhouse gases would cause a global warming”.