We talked about the Dutch ruling against Shell in yesterday's report and the latest refinery sale in the US is another indication of one of the risks of unilateral court-based decisions. Shell could easily get to lower emissions by divesting assets, as can anyone else with a medium-term emission target on the books. We have written previously about the possibility of an energy equivalent of the “bad bank” structure that was set up during the financial crisis, where emissions challenged assets are divested into either private entities or public holding companies that have mandates to improve excessive emission pools but also have significant cash flows and pay investors to wait.
We see the rulings against the oil majors this week in both the courts and in shareholders meetings as a potential trigger for more rapid and more concerning change in the energy space and we will be devoting the first section of our EGS and Climate report next week to this subject – we would appreciate any opinions, or suggested topics of interest ahead of the report.