Europe’s top polluting companies have ploughed three-quarters of their $2.1 trillion profits since 2010 into shareholder payouts rather than clean energy investments, according to Friends of the Earth.

Between 2010 and 2023, Shell paid out 97% of its profits to investors, and Total Energies dished out 86%, the green campaign group found in a study covering more than 800 energy-intensive companies. Meanwhile, energy firms BP and Eni and mining giant Glencore showered more cash on their shareholders than they received in net profits.

This trend intensified in the years after the Paris climate agreement was signed in 2015, a period that coincided with a boom in environmental, social and governance (ESG) investing.

These were also years in which dividends and equity buybacks for investors in energy-intensive companies almost doubled as a share of turnover, from 2.4% in 2010 to 4.4% in 2023. After 2015, shareholders siphoned off a cumulative $1.1 trillion from $1.4 trillion of profits.

At the same time, the companies’ rate of business investment fell from 18.4% in 2010 to 14.9% in 2023.

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The analysis casts doubt on an official perspective gaining ground in Brussels that Europe’s businesses are hampered by a lack of access to capital, including to invest in decarbonisation. Next week, the European Commission is expected to lean into this, announcing more deregulation and public handouts at the launch of its Clean Industrial Deal, after a push by many of the same energy-intensive companies that have spent the last decade profit-taking.  

A leaked draft of the Clean Industrial Deal suggests that it will contain as-yet unspecified subsidies to help energy firms such as BP and Shell increase their renewable capacity, even as these companies recently culled such projects en masse.

Danger of corporate capture

“The Clean Industrial Deal narrative is built on false premises,” said Kim Claes, a campaigner for Friends of the Earth and one of the report’s authors. “Pouring public money into corporate coffers won’t drive the energy transition – it will only pad shareholder profits. While governments are forced to cut essential services like healthcare and education, private industries demand even more public funding, draining scarce resources.”

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Claes pointed to a growing risk that the EU would follow the deregulation trend being set across the Atlantic by the new Trump administration. “The Clean Industrial Deal is echoing the same narrative,” he said.

“In times of austerity and shrinking public budgets, this could result in unconditional financial support for industries, which is highly concerning. Not only would this undermine environmental and social standards, but it would also deepen the divide between declining public service budgets and expanding subsidies for big industry. There is a real danger of corporate capture of the political sphere.”

Scaling down renewable plans

BP and Shell were both signatories to the Antwerp Declaration last February, a call by an alliance of energy-intensive companies for less administrative burden and more cash support, including public funds to de-risk investment in clean tech deployment.

Meanwhile, BP has announced that it is halting 18 potential hydrogen projects and selling wind and solar operations. It has signalled that it intends to make further cuts to its renewable energy investment later this month and increase oil and gas production. Last year, BP reportedly invested $9bn in fossil fuels compared to $1.3bn in renewables.  

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As the Antwerp call went out, Shell had just watered down and scrapped its 2030 and 2035 climate targets, citing uncertainty about the low-carbon transition. It also sold its stakes in several offshore wind projects and moved to increase gas and oil extraction. The firm spends seven times more on fossil fuels than on renewables, according to NGO Global Witness.

“This is why conditionalities are crucial,” said Judith Kirton-Darling, the secretary general of Europe’s giant IndustriAll union. “Companies shouldn’t be able to socialise the costs of the clean energy transition and privatise profits. There will need to be pub