Oil major Shell cannot switch too quickly to producing renewable energy without risking its dividend payments according to its chief executive.
More than 97% of Shell shareholders agreed at its annual meeting earlier this month to reject a resolution to invest profits from fossil fuels to become a renewable energy company.
The firm had previously said it was against the proposal.
Shell’s climate change policy has been criticised in recent months including by Dutch pension fund PGGM.
The company said Shell should be doing more to mitigate climate change risks.
But Ben Van Beurden said the oil and gas industry would need to invest up to $1trillion per year even while meeting the UN backed goal of curbing carbon emissions to limit the rise in global warming.
He said making a switch to other forms of energy would take time and said all the top 10 solar companies in the world represent $14billion in capital employed and invested $5billion in solar energy last year, but none had so far paid any dividends.
Van Beurden said: “We cannot do it overnight (transition to reneables) because it could mean the end of the company.”
Meanwhile, growing demand for oil and gas in emerging countries means that investment in the sector will have to continue.
The oil boss said it would take an “unprecedented amount of effort” to bring about a net zero emissions future.
“If collectively we find a way to stay within the two degree (celsius limit), we will still need significant investment in oil and gas…I am talking about up to a trillion dollars every day,” he added.
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