Shell removes “Royal Dutch” from its name
Shell plc has formally changed its name from Royal Dutch Shell to Shell plc after opting to streamline its share structure, relocate its headquarters from the Netherlands to the United Kingdom, and, as a result, remove the Royal Dutch designation from its name.
The energy major confirmed on January 24, 2022 that its name had changed from Royal Dutch Shell plc to Shell plc. Shell simplified its share structure as part of an effort to speed its transformation to a net-zero corporation. As a result, the company also said it would remove the Royal designation from its name.
Since the 2005 merger of Koninklijke Nederlandsche Petroleum Maatschappij and The Shell Transport and Trading Company under a single parent company, Shell had been established in the United Kingdom with Dutch tax residency and a dual share structure.
Shell, Europe’s largest energy corporation, will benefit significantly from the move. Shell will benefit from a reduced corporation tax rate and will no longer be subject to the Netherlands’ new 15% dividend withholding tax, which went into effect in January, by shifting its tax headquarters to the United Kingdom.
“The simplification will normalize our share structure under the tax and legal jurisdictions of a single country and make us more competitive,” Shell chairman Sir Andrew Mackenzie said.
Shell is the largest public firm in the Netherlands, and the Dutch government was upset by the abrupt announcement of its withdrawal. “We are unpleasantly surprised by this. The cabinet deeply regrets this intention,” Economic Affairs Minister Stef Blok said in a statement. “We are in talks with Shell about the implications of this move for jobs, critical investment decisions and sustainability. Those are hugely important.”
Shell stated in its announcement that it “will continue to be a substantial employer with a strong presence in the Netherlands.” The true core of Shell’s day-to-day business activities will remain in the Netherlands: the company’s global upstream, integrated gas, renewable energies, and technology businesses will all remain in The Hague.
On the other side, the officials in the UK welcomed the decision. Shell’s move was praised as a “clear vote of confidence in the British economy” by UK Business Minister Kwasi Kwarteng. The decision is largely regarded as a victory for post-Brexit Britain, demonstrating sustained business interest in “Global Britain” despite the country’s exit from the EU.
Six months ago, a Dutch district court ordered Shell to reduce its global carbon emissions by 45 percent by 2030. Shell is appealing the verdict, and the relocation of the company’s corporate offices is not likely to have an impact on the result of the lawsuit.
Shell’s transition to remain dependent on society’s progress
Shell’s CEO, Ben van Beurden, talked about the upcoming year and why the company has to accelerate its transition. Van Beurden cited a judgement by a Dutch court that Shell should lower its carbon emissions quicker than expected as one of 2021’s low points.
“I was listening at home as the judge gave her verdict. It felt like a body blow,” he said.
He further added: “I found it deeply troubling that Shell as a single business should be held accountable for how the world produces and uses energy. That goes against everything I believe in when it comes to climate change, namely that this is a societal problem, not a problem for a single company to solve. It’s also worrying that the ruling was met with so much approval in some places, as if this was indeed the solution society needed.”
Shell intends to considerably increase its investment in carbon capture and storage by 2022, as well as to find out how to construct carbon-neutral liquefied natural gas and petrochemical facilities.
“But no matter how hard we work on reducing the emissions of our customers when they use our products, our progress will remain dependent on society’s progress with the energy transition. We cannot go faster than all our customers or we would have no customers to buy our products. And we would go out of business,” van Beurden said.
Click here to join our Telegram chanel
You will get information, news, and support related to Merchant Navy.