Ad description
A TV ad for Shell, seen on 1 June 2024, featured a person dressed in overalls walking through a number of different scenes including different rooms in a house that represented activities in which Shell was engaged. They walked past electric vehicle (EV) charging points being installed in a street; an offshore gas rig followed by a kitchen representative of where the gas from that rig was ultimately delivered to; and a laboratory labelled “Energy Transition Skills Hub”, which included scenes of miniature windfarms and engineers welding materials together. A voice-over stated, “It starts with an engineer on a mission to install thousands of Shell EV chargers by 2035. Helping supply more than 20% of the UK’s gas […] and investing in people and communities, to build skills for the energy transition […] and before you know it Shell is helping power the UK; now and into the future.”
Superimposed text stated, “In 2023, 68% of Shell’s global investments included oil & gas, 23% included low-carbon energy solutions and 9% non-energy products. Shell’s target is to become a net zero emissions (NZE) energy business by 2050”. On-screen text at the end of the ad stated, “Powering Progress”.
Issue
The ASA received 75 complaints, including from Adfree Cities and Carbon Tracker, who challenged whether the ad gave a misleading impression of Shell’s environmental impact.
Response
Shell UK Ltd said the intention of the ad was to highlight to consumers the ways Shell was helping to meet the UK’s energy needs today, and into the future. That intent was reflected in the closing voice-over of the ad, which was followed by the text “Powering Progress”. A central element of the ad was the prominent depiction of Shell’s gas activities, which included both the extraction of gas, and the supply of gas to UK consumers. The ad made clear that this was a significant part of Shell’s current activities. The future-facing aspects of Shell’s activities referenced in the ad included the installation of EV chargers and references to the energy transition.
The percentages used in the superimposed qualification came from their Total Cash Capital Expenditure (TCC) figures, included in Shell plc’s 2023 Annual Report (the Annual Report). TCC comprised capital expenditure; investments in joint ventures and associates; and investments in equity securities for four categories of liquefied natural gas (LNG) and power marketing and trading; oil, oil products and other; non-energy products; and low-carbon energy solutions. The former two had been articulated as “oil & gas” in the ad. The latter included activities that had an average carbon intensity that was lower than conventional hydrocarbon products, assessed on a life cycle basis. To avoid complex numerical information that required consumers to make additional calculations, the US Dollar value for each category from the Annual Report had been converted into a percentage. ‘LNG, gas and power marketing and trading’ and ‘oil, oil products and other’ accounted for $16.6 billion of Shell’s 2023 TCC, or 68% of the total. ‘Low-carbon energy solutions’ accounted for $5.6 billion, or 23% of the total. They said the terms ‘oil & gas’, ‘low-carbon energy solutions’ and ‘non-energy products’ were easy to understand in the context of the ad. The ad had included the term low-carbon rather than lower-carbon because the former term would be clearly and accurately understood by the average consumer, and was consistent with the wording in their Annual Report. They said that lower-carbon would not have provided any additional clarity to consumers, who may have been uncertain as to whether there was a difference between the terminology used in the Annual Report and the ad. They believed specifying the most recent annual figures for those categories was the most appropriate way to clearly communicate the relevant information to viewers. To that end, the superimposed text balanced the need to provide qualifying information to consumers with the need to keep such information easy to understand.
Shell explained the figures used in the ad complied with the legal and regulatory reporting requirements Shell was subject to, based on International Financial Reporting Standards (IFRS). IFRS was an internationally recognised accounting language used by more than 145 countries, including the UK. Shell understood some complainants were concerned about the difference between the figures used in the ad and those reported by Shell in accordance with the EU Taxonomy for sustainable activities (the EU Taxonomy) – a system used to classify certain economic activities in accordance with EU standards for sustainable finance. They did not consider it necessary to refer to EU Taxonomy figures in the ad, nor that those figures would have been more appropriate than using the figures selected. They explained that the EU Taxonomy was not a global standard and was not part of UK law. The information used in the ad formed part of Shell’s disclosures under UK law and was consistent with the requirements set by the Taskforce for Climate Related Financial Disclosures (TCFD) to report on capital deployment.
In their view it was not reasonable for an ad from a UK-based company like Shell, which was part of a UK-headquartered group of companies with global operations, to use the EU Taxonomy when providing information to consumers in an ad broadcast in the UK. The information in the ad was more detailed and relevant regarding the nature of Shell’s investments in 2023 than would have been possible to communicate clearly to viewers based on the EU Taxonomy’s classification system. Specifically, the ad stated the proportion of Shell’s investments in several different categories of its business operations – namely, ‘oil and gas’ and ‘low-carbon solutions’ – which gave consumers a clear understanding, at a glance, of the relative split of Shell’s investments across different parts of its business. Conversely, the average consumer would not likely have been familiar with the classification criteria used in the EU Taxonomy, such as EU Taxonomy aligned or EU Taxonomy eligible. Its inclusion in the ad would not have effectively provided information about the proportion of investments by Shell in oil and gas relative to other parts of their business. They said the EU Taxonomy provided an incomplete picture of their low-carbon business and investments. That was because its complexity, and reliance on EU standards, made it difficult to apply to Shell’s activities outside of the EU, where a significant amount of their investments lay. They believed the use of the EU Taxonomy was not the most appropriate way to communicate the information to consumers. Additionally, the EU Taxonomy did not include a number of Shell’s global financial interests.
Shell highlighted a previous ASA ruling against them and said they had sought to include more information about the extent of their oil and gas investments. The superimposed text made it clear the majority of their investments were in that category. The main content of the ad prominently depicted Shell’s gas-producing activities and described Shell’s activities relating to the supply of gas to UK consumers, and showed oil and gas platforms. A voice-over also stated that Shell was providing gas to the UK.
Clearcast said the main focus of the ad was the engineering capabilities of Shell in transporting gas from the North Sea to people’s homes; its investment in the engineers of the future as part of its energy transition efforts; and its aim to be a net-zero emissions company by 2050. The ad did not make a statement about Shell’s environmental credentials. The ad mentioned the future energy mix with regard to Shell’s electric vehicle (EV) charger rollout and the transition to net-zero, and that was why qualifying text stating Shell’s investments was included.
Assessment
Not upheld
CAP Guidance stated that where businesses were responsible for a significant amount of harmful emissions, ads which referenced specific environmentally beneficial initiatives were more likely to mislead if they did not include balancing information about the business’s significant ongoing contribution to emissions or other environmental harm. That was particularly the case where the overall impact of the ad was likely to give a misleading impression of the company's overall environmental credentials. The Guidance also stated that while consumers were generally aware that companies in high-carbon sectors had historic and ongoing contribution to emissions, they were less likely to be aware of the significance of those companies’ green activities as a proportion of their total activities. Qualifying information to address that knowledge gap was therefore needed when making claims about specific environmental initiatives or where ads promoted more general positive environmental credentials.Consumers would understand that Shell operated in a high-carbon sector and that its products and services would include those that were carbon-intensive. While they would likely know Shell’s business comprised a mix of high and lower carbon emitting activities, they would not necessarily know how Shell’s lower-carbon initiatives factored into the company’s overall mix of business activities.The main creative elements of the ad started with a voice-over and visuals that highlighted Shell’s installation of EV chargers. The central section of the ad then moved on to focus on Shell’s extraction and supply of natural gas, from offshore fields through to domestic homes. That was emphasised by the character walking through scenes of gas extraction by an offshore rig followed by a scene in which they were depicted in a kitchen where gas was being used to cook a meal. The final few seconds of the ad focused on a laboratory setting that included imagery of a miniature windfarm and a group of engineers welding a metallic item together, and a claim that Shell were investing in building skills for the energy transition.The ad therefore did not focus singularly on the environmentally beneficial initiatives in which Shell was involved, but included elements that drew out representative examples about both lower-carbon aspects (such as, installing EV chargers and investing in upskilling people for the energy transition) and higher-carbon aspects (such as, providing gas, and energy more generally to the UK) of Shell’s business. Accordingly, viewers were likely to understand from the ad that Shell was involved in a combination of the two. The ad also contextualised the claims about the wider role played by Shell in developing the technical skills of engineers in the current and future provision of energy to the UK, and the broad claim that they were “Powering Progress”.
Those main creative elements of the ad were supported by superimposed text which gave further context to the message of the ad. The text set out that, as a proportion of Shell’s global capital investment in 2023, 68% was directed to oil & gas, 23% to low-carbon energy solutions and 9% to other non-energy products. We considered the superimposed text enabled viewers to understand the relative balance of Shell’s investments in higher and lower carbon activities at the time the ad appeared. The category label ‘low-carbon’ mirrored the wording of the Annual Report, from which the figures used were derived, and was defined in that document as referring to those energy products that had an average carbon intensity that was lower than conventional hydrocarbon products, assessed on a life cycle basis. We considered viewers would understand energy products in that category to be lower carbon intensity, such as EV chargers, than their higher carbon intensity counterparts, such as oil and gas.
We next considered whether the capital investment figures used in the superimposed text were robust and substantiated.
The figures were drawn from the Annual Report and had been compiled in compliance with the IFRS, a set of widely used and recognised global accounting standards. We acknowledged some complainants’ concerns that the figures used in the superimposed text were not the same as those in Shell’s EU Taxonomy reporting. The Annual Report gave a figure of 13% for EU Taxonomy-aligned Capital Expenditure (CapEx) on lower-carbon energy solutions. However, while Shell had included EU Taxonomy CapEx figures in its Annual Report, at the time the ad was broadcast UK-headquartered companies were not required to report sustainability-related investments in-line with the EU Taxonomy to UK based consumers, and there was no requirement under the CAP Code, or otherwise, to use that information to qualify advertising claims. We considered the IFRS-based figures included in the ad’s superimposed text, that were summarised as ‘oil & gas’ and ‘low-carbon energy solutions’, provided adequate information to viewers to contextualise further the balance of Shell’s activities.
We concluded it was clear from the ad that Shell was involved in both higher and lower carbon activity and through qualifying information that the majority of Shell’s investments comprised oil and gas, and to what degree. The ad had therefore not given a misleading overall impression of Shell’s environmental impact.
We investigated the ad under BCAP Code rules 3.1 (Misleading advertising), 3.10, 3.11 (Qualification), and 9.2 (Environmental claims), but did not find it in breach.
Action
No further action required.
