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Jun 08, 2023

Regulator bans Shell adverts over greenwashing claims

Ads flagged as misleading and omitting ‘significant information’

The Advertising Standards Authority (ASA) has banned adverts by Shell that contain misleading information about the company’s renewable electricity and hyperbolic greenwashing claims. The ban applies to a poster, a TV advert and a YouTube advert.

A poster was published in Bristol on June 20, 2022 with the caption ‘Bristol is ready for cleaner energy’ superimposed over a cityscape shot of Bristol.

Further text on the poster read: ‘In the South West 78,000 homes use 100% renewable electricity from Shell Energy. Shell Energy’s renewable electricity is supplied by the National Grid and certified by Renewable Energy Guarantees of Origin, matching electricity bought with the equivalent amount from 100% renewable sources.’

Misleading information

The advertising regulator found the adverts misleading as they ‘omitted significant information’ about the overall environmental impact of Shell’s business activities in 2022, given the fact the energy was produced through fossil fuels.

Regulator bans Shell adverts over greenwashing claims

‘We considered that consumers were increasingly concerned about the environmental impact of activities related to higher-carbon products and services,’ the ASA said in its ruling.

‘We therefore considered that, because [the adverts] gave the overall impression that a significant proportion of Shell’s business comprised lower-carbon energy products, further information about the proportion of Shell’s overall business model that comprised lower-carbon energy products was material information that should have been included.

‘Because the ads did not include such information, we concluded that they omitted material information and were likely to mislead.’

A spokesperson for Shell says: ‘We strongly disagree with the ASA’s decision, which could slow the UK’s drive toward renewable energy. People are already well aware that Shell produces the oil and gas they depend on today. When customers fill up at our petrol stations across the UK, it’s under the instantly recognisable Shell logo. 

‘But what many people don’t know is that we’re also investing heavily in low and zero-carbon energy, including building one of the UK’s largest public networks of electric-vehicle charging points. No energy transition can be successful if people are not aware of the alternatives available to them. That is what our adverts set out to show and that is why we’re concerned by this short-sighted decision.’ 

Aligning ESG goals

In May, Shareholders at Shell voted against aligning the energy company’s ESG goals with the Paris Climate Agreement, despite persistence from activists and protesters.

Regulator bans Shell adverts over greenwashing claims
Wael Sawan, Shell

At the firm’s AGM, held in London, shareholders voted against resolution 26, which would have seen the energy giant reduce its Scope 3 emissions to align with the Paris climate goals. The vote received 79 percent majority against the resolution, roughly the same as last year, while Shell’s own energy plan was passed with 80 percent of shareholders on board.

In March, Shell’s profits for 2022 hit an all-time high, reaching $39 bn. Profits were predominantly sparked by high energy bills that swept across the UK as a ripple effect from Russia’s invasion of Ukraine.

Wael Sawan, CEO at Shell, said at the time: ‘Profit without sustainability erodes our license to operate. Sustainability without profit erodes our shareholder support and financial capacity to play a meaningful part in the energy transition.

‘We must continue to provide energy and do it with fewer emissions. We can only do this with the backing of our shareholders because it is their capital that enables us to invest in the energy transition.’