Shell cookstove alliance tests UK charity rules

In one of the lighter moments of last week’s World Economic Forum in Davos, the 2013 Public Eye Award for the world’s most irresponsible company was presented to Shell. A series of humiliating Arctic misadventures during 2012 ensured that the fossil fuel company comfortably defeated Goldman Sachs in the public vote.

This news will be unwelcome to the many social and environmental initiatives which choose to accept funding from Shell, often risking the opprobrium of their supporters. These include the London Science Museum’s Climate Change Stories, the Clean Cooking Forum 2013, the World Resources Institute, Forum For The Future, and even WOMAD New Zealand.

I’ve chosen these examples carefully because they fall into two distinct categories – those that are sponsored by the Shell Corporation and those that are grantees of the Shell Foundation. There’s an important difference.

I’ve always regarded sponsorship by Shell as fair game, to the extent that the interests of the two parties are explicitly clear. Shell identifies a commercial benefit through association, typically with clean modern energy programmes which by nature soften its image as a dirty fossil fuel business. The recipient organisation needs dollars so badly that it’s prepared to take the reputational risk.

The Shell Foundation is a different cup of tea altogether, or at least it should be. The Foundation is a registered UK charity, enjoying significant tax breaks on its substantial endowment from the Shell corporation. In return, it’s expected to adhere to programmes which fulfil the Charity Commission’s “public benefit” test.

It is for this reason that the first words you see on visiting the Shell Foundation website offer reassurance that “we were established by Shell Group in 2000 as an independent UK-registered charity.”

You may find it baffling to catch sight of a rather familiar logo and your doubts about “independence” may be fuelled on discovering that no fewer than 10 of the 13 listed Foundation employees are ex-Shell staffers. And the Trustees are all appointed by Shell.

The Foundation is evidently conscious of its fragile legitimacy. An inside page of the website is devoted to “The Foundation’s relationship with Shell” under the bewildering heading of “Connected”.

The front page statement about being established by Shell Group is repeated, but with the word “independent” left out. Instead we’re introduced to the concept of “independent but linked,” culminating in an extraordinary statement:

It is accepted there may be an “indirect” benefit to Shell Group’s reputation as a result of the Foundation’s work

This text is displayed so as to suggest that the UK Charity Commission is its source. I consider this to be improbable, to say the least.

The general sense of flannel is compounded by the reassurance that only three of the six trustees are senior Shell executives. On the Trustees page, this number is given as two. The Foundation might have been wiser to remain silent on this minefield topic of independence.

There’s no denying that, were the Foundation’s programmes to be debadged of the Shell name, they would appear unremarkable. They pursue a legitimate, if flawed, philosophy that poverty reduction can be achieved only by market-driven venture philanthropy.

However, there’s one important programme in which all parties concerned have let down their guard, thereby betraying the whole shabby structure. The clear water that should be maintained between the overt commercial value of association and the independence of grant-funded projects dries up completely in Shell’s involvement with the Global Alliance for Clean Cookstoves.

This major public-private initiative, launched with much fanfare by Hillary Clinton in 2010 with the aim of bringing clean cooking and fuels to 100 million households by 2020, has the dirty fingerprints of both Shell Corporation and the Shell Foundation all over it.

The Advisory Board of the Global Alliance, responsible for “all strategic matters,” includes a senior executive from both the Foundation and the Company. Both entities are named as “co-founders” of the Alliance and both appear on the current list of corporate and donor supporters (with the same individual identified as the “primary contact name”). Significant dollars are flowing into the Alliance from both parties, as evidenced by Shell’s “Sustainability Report” and the “Annual Report of the Trustees” of the Foundation.

“Develop new business opportunities” is one of the valuable benefits that corporate donors will enjoy, according to the Alliance’s promotional material. This assurance is endorsed in Sustainable Energy for All: Opportunities for the Oil and Gas Industry, a 2012 report by Accenture. In the context of the industry’s support for clean cooking stoves, the report observes:

These actions should not be seen just as social philanthropy but as ways to expand local energy markets and potentially gain greater access to local resources through improved government relations.

Such explicit commercial undertones question how the Shell Foundation can argue that its involvement with the Global Alliance for Clean Cookstoves meets the Charity Commission’s condition that funding must “promote the charity’s interests and not the commercial interests of the profit-making entity (that provides its endowment).”

Such concerns may remain beneath the radar because the scale of the Shell Foundation’s activities is very small, both in relation to the corporation and to the potential new energy markets in developing countries.

It’s no surprise to find Shell is a busy player in the bigger game. The UN’s Sustainable Energy For All (SEFA) initiative aims to achieve universal access to modern energy services by 2030. SEFA is hosted by the UN Foundation, as is the Global Alliance for Clean Cookstoves.

The Chair of the UN Secretary-General’s Executive Committee for steering SEFA is Charles Holliday, Chair of Bank of America. Holliday is also a non-executive director of Shell.

I’ve no doubt that all of these connections could be explained as serendipitous. But surely the Cookstoves Alliance can survive without a double dose of reputational risk. And I wonder if it’s time for the UK Charity Commissioners to awaken from their slumbers and perform a public benefit test on the Shell Foundation.


The Public Eye Awards 2013

The Foundation’s Relationship with Shell from the Shell Foundation

Secretariat and Advisors from Global Alliance for Clean Cookstoves

Charities and Public Benefit from Charity Commission