Shell plc is one of the world’s largest oil and gas multinationals.
In 2023 it was voted “Worst Company of the Year” by Ethical Consumer readers.*
It’s recently been in the news over its gargantuan profits and massive executive pay offers during the cost of living crisis.
In this company profile we outline these, and other ethical issues.
Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.
Learn more about our company profiles →Our research highlights many ethical issues with Shell, including its approach to the climate, environment, supply chain, workers’ rights, tax conduct, and conflict minerals.
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Shell has faced lawsuits all over the world for its involvement in climate change, including in New York City, Baltimore, the Netherlands, and Philippines.
Shell is investing $2 billion annually in renewables, with a stated goal to cut its carbon emissions by 20% by 2035, and 50% by 2050. This is the highest renewable investment of all the oil companies, but it is still a low proportion of its $25-30 billion total annual investment.
We gave Shell a worst rating for its carbon management and reporting because of its fossil fuel investments, and because it misled customers through advertisements that suggested its products were more environmentally friendly than they really were.
It’s also responsible for several oil spills. For example, in 1970 Shell spilled oil in Nigeria, in the Ejama-Ebubu community, destroying their livelihood and polluting the waters which resulted in “numerous diseases”. Shell disputes this and insists it cleaned up the area, but in 2020 the company was ordered to pay $467m in damages.
Shell remains heavily involved in fossil fuel exploration projects yet claims that all of its tariffs in the UK energy market are 100% renewable.
It justifies this claim by saying it buys certificates – for every unit of electricity used, a unit of renewable energy is put into the grid. This is much less meaningful than generating or purchasing renewable energy, which customers might presume is the case.
We deem this to be highly misleading.
You can find out more about the market for renewable energy certificates in our energy guide.
Shell received our middle rating for Environmental Reporting, because it discusses a range of environmental issues such as biodiversity, circularity, waste reduction, water consumption and hazardous waste disposal.
For the Toxic Chemicals category, we gave Shell a worst rating. Shell supplies broadband services, and as such is involved in the electronics industry. A toxics policy was deemed necessary for all electronics companies, as the substances widely used by electronics companies have a significant negative environmental impact when released after disposal. Shell didn’t have any policy related to key toxics such as PVC, Brominated Flame Retardants, or phthalates.
Shell provides fuel for military use, so it lost half a mark under our Arms & Military Supply rating.
The company has made £7.85bn in payments to the Russian government from 2014-2021, according to the Price of Oil campaign.
Shell has operations in lots of countries on our oppressive regimes list, including:
Shell is also accused of complicity in the unlawful arrest, detention and execution of nine men hanged by Nigeria’s military government in the 1990s.
Shell worked closely with the government and “knew full well that the government regularly violated” human rights, but it continued discussing problems with the government rather than speaking out against the abuses the government was committing.
In recent years the wives of men who were tortured and executed by the Nigerian military have tried to bring Shell to trial for its role in the 1990s abuses.
In 2020 Extinction Rebellion in the UK called on Shell to pay reparations to those affected by this, and those affected by Shell oil spills in Nigeria.
Conflict minerals are also a problem for Shell. Shell makes batteries, routers, and EV charging electronics, meaning that it’s likely to use key components often used in electronics devices including tantalum, tin, tungsten and gold.
These materials are often sourced from areas of armed conflict and human rights abuses in the Democratic Republic of Congo.
Our research found that Shell’s policy on this issue was inadequate and wasn’t considered to safeguard against the risk of conflict minerals in its supply chain.
Shell also received our worst rating for Supply Chain Management, as it doesn’t have stringent measures in place to ensure the rights of workers in its supply chain are upheld.
This has had major consequences – one example is highlighted by the union IndustriALL, which found a series of case studies of workers who lost their lives at Shell contractors in Nigeria, and were denied rights such as unionisation and fair pay. Shell denies the allegations.
Shell tests on animals.
Its policy in 2023 stated: “Most of the animal testing we carry out uses laboratory-bred rats, mice and fish.”
While it said it was trying to eliminate animal testing and followed “internationally accepted principles” around animal testing, it still received our worst rating for its animal testing policy.
Whilst the climate emergency continues, oil and gas giants, like Shell, have announced record-breaking profits. For example, Shell announced annual adjusted profits of $40 billion in 2022, exceeding the $19 billion it generated in 2021.
Shell’s highest paid director received almost €12 million in 2022, which results in it losing a whole mark in our Excessive Directors’ Pay category.
High pay isn’t the only problem when it comes to Shell’s political activities.
Shell PLC spent $7.3 million on political lobbying in the US in 2021. It was also revealed by the Guardian to be providing ‘administrative and public relations support’ to UK MPs through trade associations like the UK Petroleum Industry Association, alongside other oil and gas producers including BP and ExxonMobil.
Shell’s a member of several lobby groups that place corporate pressure on policy-makers to adopt solutions that suit business, potentially at the expense of the environment and human rights.
These include:
It is also a member of the American Chemistry Council, which lobbied to reverse Kenya’s plastic bag ban.
Shell received our worst rating for its tax conduct, as it has subsidiaries in tax havens such as the Bahamas, Bermuda, Cayman Islands, Hong Kong, Jersey, Luxembourg, Singapore and more.
In 2020 it was also revealed that Shell paid no corporate income tax in 2018, despite profits of nearly $731m.
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Most research for this article was gathered in Dec-January 2023.
We surveyed our readers asking them to vote for the worst company of 2022.
Shell received 60% of the vote and was the 'winner'!
The top companies people voted for were Shell, Amazon and ExxonMobil.
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