Press Story

The UK’s leading progressive thinktank, IPPR, has responded to the announcement that Shell has made £3.9 billion ($5.1 billion) in profits in the last quarter (Apr-Jun). Shell have also announced a new round of share buybacks, transferring £2.3 billion ($3 billion) to shareholders, following on from £13.8 billion ($17.35 billion) of buybacks in 2022. In Q2 of 2023 Shell’s total transfers to shareholders (i.e. its dividends and its share buybacks) of £4.3 billion ($5.6 billion) actually exceeded its total profits.

Dr George Dibb, head of the Centre for Economic Justice at IPPR, said:

“Shell has proven its commitment to putting profits and shareholders over our planet. It continues to make huge amounts of money off the back of the war in Ukraine and high energy prices. Meanwhile, incredibly, Shell is now paying more out to its shareholders in dividends and buybacks than it makes in profit, clearly prioritising these transfers over investing a net zero future. If fossil fuel firms refuse to invest in decarbonisation then it’s right for the UK government, like the USA and Canada, to tax share buybacks to support greater public investment in the transition to net zero.”

A report published by IPPR and Common Wealth argued that share buybacks are a direct cash transfer away from households struggling to pay bills, via energy company profits, to already-wealthy shareholders. The report, Buy Back Better, contained the following analysis:

Share buybacks channel profits from companies to shareholders by increasing the value of shareholders’ stock.
FTSE 100 companies announced £55 billion share buybacks in 2022.
President Biden has recently introduced a tax on share buybacks to help alleviate the cost-of-living crisis in America.
Share buy backs were actually illegal as a form of market manipulation until 1981.