Fossil Fuel Companies Are Grappling with Climate Change FacebookTwitterLinkedInEmailPrint分享Time:A peculiar theme park in the Hague celebrates the history of the Netherlands through a series of miniature models. The Madurodam features little canals, old-fashioned windmills, tiny tulips and, amid it all, an homage to Royal Dutch Shell, the oil giant that is the biggest company in the country and, by revenue, the second largest publicly traded oil-and-gas company in the world. There’s a Shell drilling platform, a Shell gas station and a Shell natural-gas field, complete with a drilling rig. The display is at once odd–energy infrastructure in a children’s theme park–and entirely fitting: Shell has been, for decades, one of the most powerful players both in Dutch politics and on the global economic stage.But that could soon change. As concerns grow over the existential challenges posed by climate change, Shell must grapple with its own existential crisis: How should a company that generates most of its profits by serving the world’s enormous appetite for oil navigate a long-term future in which shifting political and economic tides threaten to make fossil fuels obsolete?Shell CEO Ben van Beurden has a bird’s-eye view of the situation from his corner office at the company’s global headquarters in the Hague. “We have to figure out what are the right bets to take in a world that is completely changing because of society’s concerns around climate change,” he says.Projections from energy companies show demand for oil could peak and fall in the coming decades; some outside analyses suggest demand for oil could plateau as soon as 2025. Markets are already jittery about the industry: energy was the worst-performing sector on the S&P 500 index in 2019. In 1980, the energy industry represented 28% of the index’s value, according to the Institute for Energy Economics and Financial Analysis (IEEFA). Last year, it represented less than 5%. The shift away from oil looms so large that Moody’s warned in 2018 that the energy transition represents “significant business and credit risk” for oil companies. The heads of the Banks of England and France said in an op-ed that any company that does not change strategically to the new energy reality “will fail to exist.” On Jan. 14, Larry Fink, founder and CEO of investment giant BlackRock, wrote in an open letter that “climate change has become a defining factor in companies’ long-term prospects.”As oil flirts with the prospect of decline, energy executives are at odds over what to do. Some firms, like ExxonMobil, are positioning themselves to squeeze the last lucrative years from the oil economy while arguing to shareholders that they will be able to sell all their oil. Shell and a handful of others are beginning to adapt.Under van Beurden’s leadership, Shell is charting a path that will allow it to continue to profit from oil and gas while simultaneously expanding its plastics business and diversifying into electrical power. By the 2030s, the 112-year-old fossil-fuel giant wants to become the world’s largest power company. As part of this strategy, Shell has worked to present itself as environmentally friendly. Last year, it committed to reduce its emissions by as much as 3% by 2021, and by around 50% by 2050, tying its executives’ compensation to the cuts.Analysts say it’s too early to tell whether Shell’s strategy to reduce reliance on oil will pay off for shareholders in the long run. Last year, Shell, while continuing to pay large dividends, bought back stock, helping maintain its share price. The maneuver kept the company’s stock valuation roughly level, but it’s hardly a workable long-term strategy. Across the sector, companies “have to figure out who they are in this changing market,” says Tom Sanzillo, director of finance at the IEEFA. “They are not the profit center that they used to be, and they probably never will be.”The viability of sticking with oil, even as major world economies promise to move away, is uncertain. Both ExxonMobil and Chevron are staying the course, hoping to outlast their competitors. But Shell and others are moving to adapt. BP, for instance, has also invested in natural gas and power, while ConocoPhillips has prioritized “short-cycle project times” to help it stay economically competitive. Occidental has dropped money into a method of drilling that allows it to store CO2 in the ground, a bet that it can offset some of the regulatory costs of CO2 emissions within its own operations. And in December, the Spanish oil giant Repsol committed to being carbon-neutral by 2050 and wrote down many of its oil assets on the grounds that their value will diminish as oil fades.[Justin Worland]More: The Reason Fossil Fuel Companies Are Finally Reckoning With Climate Change
1SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Aris Jerahian Aris is the AVP of Card Services at Orange County’s Credit Union. A payment industry executive with more than 15 years of credit, debit portfolio management, consulting and operational … Web: www.orangecountyscu.org Details Over the past several months, I must have received over a dozen phone calls from credit unions trying to better understand how to define a payment strategy. A strong payment strategy can provide a blueprint for all the elements of your business that touch payments. This strategy must be a comprehensive, holistic plan outlining goals and major initiatives. It’s important to remember that there’s no “one size fits all” approach – a strategy will be driven by a credit union’s unique requirements and member needs.The ability for credit unions to compete successfully in this rapidly-evolving world of digital payments is often first determined by identifying a presence of any shortcomings. These can include a lack of an existing formalized payment strategy, complicated governance approaches to payments, or failure to adopt new technologies or establish partnerships with Fintechs that offer new services delivering to members’ desires.The same challenges are also creating opportunities for credit unions of all sizes. Significant changes to long-held policies and procedures are now being required in the realm of capital investments and technology. There is now opportunity to explore new technologies and applications, enabling credit unions to formulate an appropriate response to the seismic generational shift in member attitudes, behaviors, and expectations.The question remains – how should a credit union decipher all the options and identify which payment option to offer to its members?Simply put, a credit union must first define what constitutes a payment. It may include all or a few of the following product lines: credit, debit, PIN, EFT, bill pay, ACH, checks, prepaid. The list is quite extensive, and in many instances, these product lines are managed across or within several departments. Once payment types have been established, leaders should then identify the areas that fall within the “payment strategy” umbrella. Depending on the strategy, it may make sense to have all payment services bundled together. Another approach is to manage them in separate departments, but establish a point person to lead the payment strategy for the organization. Either option can help the credit union establish the necessary foundation for a seamless payment experience.The reality is it’s more than just a solid payment product. Today’s member expects banking interactions to be simple, intuitive, and seamless. Here are a few ways your credit union can work toward a providing a more ideal experience:Focus on the journeys and sub-journeys that matter the most. Simply offering a home-banking platform does not help your credit union if the sub-journey, such as activating a card or setting up travel notifications, is not included or if the experience is cumbersome. Optimize the member experience by identifying pain points in the member journey and sub-journeys. Journey-mapping is an excellent way to get a 360-degree view of successes and areas of improvement from the member and organization perspective. These insights can provide the ability to prioritize, revise, and implement positive improvements to the experience and ultimately increase the use of your payment product/service.Change the way you engage with members. New entrants in the digital banking world, such as N26, “expect to reach more than 50 million customers in the coming years”, said Valentin Stalf, CEO of N26. Financial institutions that provide simple, intuitive banking experience growth at an increased rate due in large part to enhanced engagement and functionality. Your credit union can improve engagement and remain competitive by delivering speed, simplicity, and ease. Examples include providing immediate verification of transactions and postings, simple ways to track and manage spending, and ease in sending money and splitting bills. Understand your members. Regardless of the product or service, acquiring a deep understanding of your member base is critical to your credit union’s success. There’s an increased demand for personalized, one-to-one engagement, and when it comes to payments, there’s no exception. Members expect their credit union to know their wants, needs, and preferences. Generational segmentation is also an important layer to consider. For instance, an aging member base often requires a different communication style or banking approach as compared to digitally reliant millennials. Understanding your members’ financial needs, lifestyles, and preferences will open opportunities to offer them more timely, relevant products and communications in the manner they prefer.When it comes to payment strategy, the foundation of a credit union’s vision should be to offer its members a fast, easy-to-use, safe and seamless experience. The understanding of requirements and limitations partnered with member wants, needs, and preferences will offer a strategic advantage, ultimately resulting in increased engagement, satisfaction, and growth.