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    40 years of shell scenarios. (2012). Recuperado de la base de datos de UESAN (048765)

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    SCENARIOS HELP US TO

    MAKE CRUCIAL CHOICESIN UNCERTAIN TIMESAS WE GRAPPLE WITHTOUGH ENERGY ANDENVIRONMENTAL ISSUESPETER VOSER, CHIEF EXECUTIVE OFFICER, ROYAL DUTCH SHELL

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    CONTENTS

    32

    18

    SCENARIOS INSPIRED NEW VISIONSFOR POST-APARTHEID SOUTH AFRICA 

    ENERGY SCENARIOS TO 2050 AND THE THREE HARD TRUTHS

     AN URBAN PLANET IN SEARCH OFENERGY, WATER AND FOOD SECURITY 

    2 FOREWORD JEREMY BENTHAM

    6

    810

    12

    SHELL SCENARIOS SOWEDSEEDS FOR STRATEGIC SUCCESS

    SCENARIO FINGERPRINTS

    SCENARIOS ANDTHOUGHT LEADERSHIP

    THE SECRET OF SUCCESS

    THE ‘FATHER OF SCENARIOS’ WHO SHAPED SHELL’S FUTURE

    2242

    SHELL’S 1973 OIL SHOCKSCENARIO SUCCESS

    SOWING SEEDS FOR THE U NITED NATIONS’LANDMARK AIDS IN AFRICA SCENARIOS

    38

    46

    58

    60

    66

     C A  S E  S T  U D I  E  S 

    TEAM PROFILES O V E R  V I  E  W

    16

    26

    ERA OF VOLATILE TRANSITIONDEMANDS NEW APPROACH

    PAST AND PRESENTTEAM LEADERS

    SCENARIOS: THEIR ROOTS AND DEVELOPMENT

     ACKNOWLEDGEMENT

    SCENARIO PLANNING: PART OFSINGAPORE’S DNA FOR TWO DECADES

    REBUILDING TRUST, AT THE HEARTOF MACONDO SCENARIOS 2010

    52

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     JEREMY BENTHAM, HEAD OF SCENARIOS, STRATEGY AND BUSINESS DEVELOPMENT, ROYAL DUTCH SHELL

    SCENARIOS GIVE US LENSESTHAT HELP US SEE FUTUREPROSPECTS MORE CLEARLY,MAKE RICHER JUDGMENTSAND BE MORE SENSITIVETO UNCERTAINTIES

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    40 YEARS OF SHELL SCENARIOS

    3

    It is a huge privilege to introduce this celebration ofscenario planning in Shell. Each new piece of work has

    built on past insights and experience – ensuring that thepractice has learned from the past and evolved even asthe times have changed. I thank everyone who has been

    part of this 40-year journey and offer best wishes to thosewho will take the project forward.

    The purpose of scenarios is to help people make better

    strategic choices. In this process, there needs to bea special relationship between decision-makers andscenario developers.

    Discussions about alternative scenarios for the futureare one of the ways decision-makers are exposed todifferent possibilities, helping them to move the furniturearound mentally. They relax prejudices and advocacy,

    embracing ambiguity to form practical and pragmaticinsights. It can be a subtle, even quiet and stealthyprocess, over a long period. It depends on a climate

    of open-mindedness and trust.

    Generations of leaders in Shell have been preparedto invest in this process and they too deserve thanks for

    helping to sustain the environment in which scenarioplanning has flourished.

    Looking ahead, we are experiencing turbulent times.

    The choices we make today have consequences andsome will have a deep impact over many years.

    Scenarios are grounded in an understanding that

    choices shape our pathways to the future just as muchas the uncertainties in economic, political and socialsystems drive change.

    Scenarios give us lenses that help us see future prospectsmore clearly, make richer judgments and be more sensitiveto uncertainties. We continue to challenge oursel ves by

    developing new scenarios that will help Shell to focus onkey features in the landscape of the future from fresh angles.

    We look forward to sharing our work with you and – in aspirit of enquiry, collaboration and enthusiasm – to taking

    our scenario conversations into the next decade.

     JEREMY BENTHAMHEAD OF SCENARIOS, STRATEGY AND BUSINESS DEVELOPMENT, ROYAL DUTCH SHELL

    SCENARIOS ARE GROUNDED IN ANUNDERSTANDING THAT CHOICES SHAPEALTERNATIVE FUTURE PATHWAYS JUSTAS MUCH AS THE UNCERTAINTIES INECONOMIC, POLITICAL AND SOCIALSYSTEMS DRIVE CHANGE

    FOREWORD

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    OVERVIEW

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    IN 1973, THE GLOBAL ECONOMY WAS SHOCKED BY A MAJOROIL CRISIS. SHELL WASN’T.

    In the 1960s a pioneering team of economists, engineersand scientists had started work on Shell’s first scenarios. Theylooked at how the future might unfold and the impact this could

    have on the company. By 1973 they had shared these earlyscenarios with Shell’s management, daring them to think theunthinkable: What if the world faced an oil crisis?

    When the Yom Kippur War broke out in October of that year,

    the West’s support for Israel angered oil-rich Arab states,triggering an oil embargo. Fuel shortages sparked a globalrecession and a massive stock market crash. The world reeled.But Shell’s decision makers were mentally prepared for the

    worst because they had already imagined it.

    These disciplined imaginings of the early Scenarios Teamincluded choices Shell could make to cushion the blow froman oil crisis. Pierre Wack, often dubbed the ‘Father of Shell

    Scenarios’, led these early developments and challengedtraditional management thinking. He urged executives to

    abandon their assumptions, including the overriding globalbelief that oil supply was infinite.

    Four decades on, a new generation of scenario plannersis still looking to the future and identifying uncertainties,challenges and opportunities. Like their predecessors, theywork to ensure that Shell is not surprised by events as the

    future unfolds. They engage regularly with decision-makingexecutives to review vital intelligence and insights to help thecompany survive and thrive in times both volatile and stable.

    The 1973 scenarios first established Shell’s reputation for usingthis hitherto academic approach to inform strategic businessplanning. They helped Shell weather the volatility of the 1970s,

    bringing financial gains running into the billions of dollars thanksto the sale of refineries and installations or decisions not toreplace them. Shell has spent four decades since then producingand using many types of scenarios to anticipate global

    economic, social and political changes and their likely impacton business. Summaries of some of these have been regularlyshared outside Shell, contributing to important public debates.

    Today’s Scenarios Team confronts new challenges in a

    world shaken by fresh economic and political turmoil. As wemove deeper into the 21st century, the world’s population isbooming and demand for s ustainable energy, water, landand food is growing, fuelling tensions over scarce resources.

    Building on the success of the past, today’s team isapproaching the development of upcoming scenarios in a

    fresh way, recognising that all outlooks in this complex worldwill be messy. The new approach will provide clarity and

    insights by zooming in on specific details and then zoomingout to a broader panorama.

    The new scenarios, which will be ready in 2013, will focuson areas that are significant in the development of energy and

    environmental systems in the 21st century. These include, forexample, the connection between energy, water and foodsystems and the impact of the world’s accelerated urbanisation.

    SHELL SCENARIOSSOWED SEEDS FORSTRATEGIC SUCCESS

    1960S 2013+1972/3THE TEAM HAD SHAREDTHESE EARLY SCENARIOS WITH SHELL’S MANAGEMENT,DARING THEM TO THINK THEUNTHINKABLE: WHAT IF THE WORLD FACED AN OIL CRISIS?

    THE NEW LENS SCENARIOSFOCUS ON AREAS THAT WILL BE SIGNIFICANT IN THEDEVELOPMENT OF ENERGY AND ENVIRONMENTALSYSTEMS IN THE 21ST CENTURY 

     A PIONEERING TEAM OFECONOMISTS, ENGINEERS AND SCIENTISTS HADSTARTED WORK ON SHELL’SFIRST SCENARIOS

    TODAY’S SCENARIOS TEAM CONFRONTSNEW CHALLENGES IN A WORLD SHAKEN BY

    FRESH ECONOMIC AND POLITICAL TURMOIL

    POPULATION

    BOOM

    DEMAND

    FOOD WATERLAND

    OVERVIEW Strategic success

    40 YEARS OF SHELL SCENARIOS

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    40 YEARS OF SHELL SCENARIOS

    9

    3CLIMATE CHANGE IS A PRESSING REALITY 

    SUPPLY WILL STRUGGLE TO KEEP UP

    GLOBAL ENERGY DEMAND IS SURGING

    HARDTRUTHS

    SHELL’S CEO AND LEADERSHIP TOOK THE VIEWTHAT THE BLUEPRINTS  VISION WOULD PROVIDEA MORE SUSTAINABLE FUTURE, NOT JUST FORBUSINESS ITSELF BUT FOR THE WIDER WORLD

    Shell has shared at least half a dozen far-reaching globalscenarios with the wider world since the 1990s, probingthe impact of profound developments like the fall of theIron Curtain and the war in Iraq, as well as the evolutionof alternative energy resources like biofuels, shale gas andrenewable energy resources like wind and solar power.

    In 2008, Shell’s Energy Scenarios to 2050 , Blueprints and Scramble , emphasised how crucial it was for the world

    to realise three hard truths: that global energy demandis surging, that supply will struggle to keep up and thatclimate change is a pressing reality.

    Although it shares its scenarios, Shell almost alwaysrefrains from commenting on what it believes would bea better future for the world. But in 2008, it publiclysupported the basic outcomes of Blueprints – an energyfuture in which emerging coalitions of interests eventuallyaccelerate regulatory developments and the implementationof lower-carbon energy and technology.

    The alternative scenario,Scramble , portrayed a future basedon governments focusing narrowly on their own energyinterests, neglecting demand-side management and leavingthem unprepared for broader supply stresses until it is too late.

    Shell’s CEO and leadership took the view that the Blueprints vision would provide a more sustainable future, not just forbusiness itself but for the wider world.

    THE

    SCENARIOS AND THOUGHT LEADERSHIP.

    OVERVIEW Thought leadership

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    40 YEARS OF SHELL SCENARIOS

    11

    Although most companies monitor changes in their business

    environment, Shell is one of the few that routinely employsthese alternative outlooks as core strategic tools. The successof the scenarios lies not just in their ability to provide strategicinsights but also in their approach to developing and sharing

    these insights.

    The early scenario developers e mbraced intuition, uncertaintyand engagement. They did not shy away from talking aboutwhat could be considered ‘ unimaginable’.

    “While we can’t predict the future, science-based creativethinking can give us some clues,” says Dr Angela Wilkinson,from the Smith School of Enterprise and the Environment atOxford University.

    Today’s scenario builders use complex econometric models

    and sophisticated methodologies. The scenarios developmentprocess now includes a multitude of short, medium andlong-term portraits of global energy developments, but alsoindividual country analyses and consideration of major trends,

    like AIDS and urbanisation.

    As always, drawing on the knowledge and imagination ofa network of gifted people – both within and outside Shell– is vital to the success of scenario building. And effective

    modes of engaging decision-making executives remain vitalto their impact.

    THE SUCCESS OF THE SCENARIOS LIESNOT JUST IN THEIR ABILITY TO PROVIDESTRATEGIC INSIGHTS BUT ALSO INTHEIR APPROACH TO DEVELOPINGAND SHARING THESE INSIGHTS

    THE SECRET OF SUCCESS.

    OVERVIEW The secret of success

    40 YEARS OF SHELL SCENARIOS

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    40 YEARS OF SHELL SCENARIOS

    13

    Neither rigid predictions nor wild fantasies, building scenariosis a craft that holds real commercial value for Shell.

    The process of developing scenarios enables the company’sdecision-makers to think about the possible wider andlonger-reaching implications of unfolding trends and potential

    discontinuities. They can help to deliver better long-termprospects for Shell, the industry and society.

    For an industry investing billion-dollar sums in infrastructurewhich can operate for decades, a robust outlook is important.Today scenarios continue to influence thinking from the Board

    and Executive Committee right across the business.

    Many important strategic decisions taken by Shell over thelast four decades have the fingerprints of the Scenarios Teamon them. Of course, all major choices involve multiple inputs

    from many people, but scenarios have explicitly highlightedspecific threats and opportunities or, more frequently, implicitlyinformed the fundamental mindsets underpinning the decision.

    Following the success of the 1973 scenarios, further scenario

    planning prepared Shell for subsequent global shifts.

    Shell’s Scenarios helped the company to anticipate, adapt andrespond to another oil shock in 1979, as well as the decline andeventual collapse of the Soviet Union in the 1980s. While they

    were never absolute predictions or forecasts, scenarios helped

    to prepare the company for the rise of environmental concernslinked to CO

    2 in the 1990s and to explore the dynamics of

    recession and recovery in the 2000s. In the past two decades,

    scenarios prepared the company for the impact of technology,terrorism and globalisation in a rapidly changing world.

    Long before the Berlin Wall dividing West and East Germanycame down in 1989, scenarios workshops had imagined

    potential new opportunities in markets opening up – not onlyin the Soviet Union but across Eastern Europe. Shell not onlyopened refineries in Eastern Europe, it closed down or soldsome in Western Europe.

    In the 1990s, growing social and environmental stresseswere highlighted, helping Shell develop a constructive,

    proactive attitude to the threat of climate change.

    In 2005, they also raised the probability of a looming gapbetween the world’s surging demand for energy and global

    supplies and reinforced the significance of natural gas in thecompany’s energy mix.

    A few years later they highlighted a mix of circumstancesthat made sustainable biofuels look like an attractive businessopportunity. In 2011, Shell moved into the production of

    low-carbon bio-ethanol from Brazilian sugar cane.

    In Shell’s Signals & Signposts scenarios review, one of thekey factors raised was the impact of heightened politicaltension in the developing world. In early 2011, the Arab

    Spring took the world by surprise, with popular revoltstoppling rulers in Egypt and Tunisia and sowing the seedsfor reform throughout the Middle East.

    While scenarios couldn’t, of course, predict the exact date

    of the uprising in the Middle East and North Africa, theyhad highlighted conditions that would make the rebellionsincreasingly likely: growing resentment, youthful populationswith little opportunity for employment, economic volatility,

    rising unemployment and inflation.

    Signals & Signposts was published in late 2010 as acommentary and update to Scramble and Blueprints –Shell’s

    Energy Scenarios to 2050 , which remain credible visions

    as the world grapples with the challenges posed by thehard truths of the global energy system. A new scenariospublication will be launched in 2013.

    SCENARIO FINGERPRINTS.

    1970S 1990S 2000STHE DECLINE ANDEVENTUAL COLLAPSEOF THE SOVIET UNION

     ANOTHER OIL SHOCK THE RISE OFENVIRONMENTALCONCERNS LINKED TO CO2

    THE DYNAMICSOF RECESSION AND RECOVERY 

    SCENARIOS – WHICH STRIVE TO EXPLORE AND ACCURATELYASSESS EQUALLY PLAUSIBLE FUTURES – HAVE HELPED SHELLMAKE BETTER LONG-TERM INVESTMENT DECISIONS

    OVERVIEW Scenario fingerprints

    1980S

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    CASE STUDY 01

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    40 YEARS OF SHELL SCENARIOS

    17 

    ... scenarios and their development enable us to think through possible wider and longer-reachingimplications of unfolding trends and potential discontinuities. In this way we can avoid being caught

    by surprise and are instead empowered to adapt more speedily to change.

    NEITHER WISHFUL FANTASIES NOR RIGID FORECASTS...

    SCENARIOSTHEIR ROOTS AND DEVELOPMENT

    Scenarios hold real commercial andstrategic value. Many governments,institutes and leading organisations nowmaintain their own scenario divisions. Allask themselves the same question: “Whatif?” Considering the future enables us totest our strategies, weighing the strengthsand identifying potential challenges.

    The United States Air Force initiatedthe first scenarios after WWII in orderto anticipate surprise nuclear attacksby considering alternative strategies.Herman Kahn was one of the scenarioplanners and strategists at that time andrewrote these scenarios for businesses.

    Scenarios also affect the way people

    perceive the world around them, bringinginvaluable insight and influencing choices. At Shell, scenarios play a role in moststrategic company decisions.

    The scenarios analysis focuses onfour key areas – economics, energyand the environment, (geo)politics and

    socio-cultural issues – to understandhow consumers, governments, energyproducers and regulators are likely tobehave and respond to change in thedecades ahead.

    Scenarios can take a global view orfocus on specific countries such as Libyaor Iraq, or specific sectors such as gas

    or manufacturing. They typically lookdecades ahead, but can often have ashorter-term focus, as with the Eurozonefinancial crisis. The ultimate goal ofscenarios is to encourage and equipShell’s decision-makers to consider factorsthat shape their choices right now.

    SCENARIOS ALSO AFFECT THE WAY

    PEOPLE PERCEIVE THE WORLD AROUNDTHEM, BRINGING INVALUABLE INSIGHTAND INFLUENCING CHOICES. AT SHELL,SCENARIOS PLAY A ROLE IN MOSTSTRATEGIC COMPANY DECISIONS

    THE UNITED STATES AIR FORCE INITIATEDTHE FIRST SCENARIOS AFTER WWIIIN ORDER TO ANTICIPATE SURPRISENUCLEAR ATTACKS BY CONSIDERINGALTERNATIVE STRATEGIES

    01

    19CASE STUDY 02

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    40 YEARS OF SHELL SCENARIOS

    19

    WACK FOSTERED THE BELIEFTHAT A BUSINESS THATIMAGINES MULTIPLE WAYSTHE FUTURE MAY UNFOLDIS BETTER PREPARED TOOVERCOME CHALLENGESAND SEIZE OPPORTUNITIES

    He was inspired by an Armenian-born mystic and spiritual teacher. He burnt incense sticks in his London officein the 1970s and paid lengthy visits to a guru in India.

    THE ‘FATHER OF SCENARIOS’ WHO SHAPED SHELL’S FUTURE.

    Pierre Wack embraced unconventionalideas, challenged managerial assumptionsand pioneered new strategic thinking.The Frenchman went on to become one ofthe world’s most influential managementthinkers and was dubbed the ‘Father ofShell Scenarios’.

     As Head of Shell’s Group PlanningDivision, Wack helped the companyin the early 1970s to anticipate thepossibility of a sharp rise in oil pricesahead of the 1973 oil crisis. As a result,he laid the foundations for four decadesof scenario planning.

     Wack fostered the belief that a businessthat imagines multiple ways the future mayunfold is better prepared to overcomechallenges and seize opportunities.

     Wack was inspired by Georges Gurdjieff,a Greco-Armenian guru who believed thatmost human beings who are awake act

    as if they are asleep. The mystic arguedthat people had to work hard to reachgreater levels of awareness and insight.

    Inspired by these ideas, Wackencouraged Shell’s managers tochallenge conventional businessthinking. He opted for a c onfrontationalapproach, breaking down theirassumptions. The aim was to view the world from new perspecti ves and toopen different windows on the world.

    He believed that companies spent toomuch time thinking about demandand supply trends, price changes, newtechnologies, competition and economicfluctuation, but not enough time usingtheir intelligence and intuition to sharpentheir understanding of a complex world.

    “Deep in our hearts, we would all choosea scenario with no surprises,” said Wack.

    Shell’s early scenarios in 1971–73proved the value of Wack’s approach.They helped Shell to anticipate theimpact of the crisis in the Middle East in1973, sparked by an Arab oil embargoimposed in response to Western supportfor Israel in the Yom Kippur War. By 1972Shell Scenarios were warning of a sharprise in prices “resulting from increasingoil scarcity, which may take place at anymoment in the next few years.”

     Wack died in 1992 aged 70 and sp enthis final years in France living in a 14thcentury chateau in the Dordogne. Whilehe saw out his life in an historic setting,his legacy was that of a moderniser.He spent his life with his gaze firmlyfixed on the horizon.

       C   H   A   L   L   E   N   G   E

       C   O   N   V   E   N   T   I   O   N   A   L

       B   U   S   I   N   E   S   S

       T   H   I   N   K   I   N   G

    WACK HELPED THE COMPANY INTHE EARLY 1970s TO ANTICIPATE THEPOSSIBILITY OF A SHARP RISE IN OILPRICES AHEAD OF THE 1973 OIL CRISIS

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    40 YEARS OF SHELL SCENARIOS

    DEEP IN OUR HEARTS,WE WOULD ALLCHOOSE A SCENARIOWITH NO SURPRISESPIERRE WACK, THE ‘FATHER OF SCENARIOS’

    23CASE STUDY 03

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    40 YEARS OF SHELL SCENARIOS

    Shell sowed the seeds for scenario planning in a fertile decade of experimentation: the 1960s.By the early 1970s, scenarios had not only taken root, they had borne fruit.

    SHELL’S 1973 OIL SHOCK SCENARIO SUCCESS.

    The ‘1973 Scenarios’, as they becameknown, allowed Shell to foresee thepossibility of a Middle East oil shockand to respond more swiftly than itscompetitors when a crisis struck in 1973.

    The ‘1973 Scenarios’ created a legacyof credible, critical and cutting-edgestrategic planning at Shell. They soundedan alarm bell about the potential fora sharp rise in energy prices monthsbefore the 1973 oil crisis shook theglobal economy. They also created anew approach to business planningthat survives today. They underlined theimportance of imagining how future eventsmight plausibly shape the world ratherthan attempting to forecast probable orpreferable visions of tomorrow.

    The pieces of the jigsaw which were toform this body of work started fallinginto place as early as 1970. Bit by bitthe picture began to take shape.

    By September 1972, Head of Scenarios,Pierre Wack, gave what is recalled bythose who attended as an ‘enthralling

    three-hour performance’ in which heoutlined six scenarios depicted as a riverforking into two streams, each in turndividing further into three tributaries.

    These scenarios not only suggesteda shift in attitudes of producergovernments, but also highlighted thegrowing power of OPEC and a possibleMiddle East oil crisis and price hike.

    In October 1973, the oil crisis struck. Arab producers imposed an oil embargoon Western governments in response totheir support for Israel in the Yom Kippur War. It triggered petrol pump queues, astock market slump, rising unemploymentand soaring inflation. The price of crudeoil soared from around $2.50 to $11 in

    a matter of weeks.

     Word of Shell’s approach spreadfar and wide. From 1973 to 1974, Wack presented the scenarios to Shelloperating companies in Europe and Asia, as well as to the UK’s PrimeMinister Edward Heath and the U.S.State Department. In later decades,

    Shell Scenarios would be followed with similar interest by the wider world,becoming a brand in their own right.

    The 1973 oil crisis put an end to 25golden years for the oil industry in the wake of World War Two, rattled the world’s seven big oil comp anies andsparked a global economic shock. But thecrisis also proved an invaluable lessonfor Shell: grappling with uncertaintyusing scenario planning was criticalto Shell’s future success. Indeed, whilescenarios are primarily aimed at enablingricher strategic conversations about thefuture, their success in anticipating thecrisis helped embed the approach in thecompany’s strategic DNA.

    ... EACH INTURN DIVIDING

    FURTHER INTOTHREE TRIBUTARIES

    ... FORKING INTOTWO STREAMS...

    ... SIX SCENARIOSDEPICTED AS A RIVER ...

    IN SEPTEMBER 1972, HEAD OF SCENARIOS, PIERRE WACK, GAVEWHAT IS RECALLED BY THOSE WHO ATTENDED AS AN ‘ENTHRALLINGTHREE-HOUR PERFORMANCE’ IN WHICH HE OUTLINED...

    25

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    40 YEARS OF SHELL SCENARIOS

    ONE OF THE KEY INSIGHTS OF THE EARLY YEARS OF SHELL SCENARIOSWAS THAT IN ORDER TO SURVIVE AND EVEN THRIVE UNDER CONDITIONS

    OF UNCERTAINTY, IT WAS IMPORTANT TO HARNESS INTUITION, ENGAGEWITH UNCERTAINTY AS MORE THAN A LACK OF KNOWLEDGE, ANDATTEND TO THE QUALITY OF ‘STRATEGIC CONVERSATION’ RATHERTHAN JUST THE QUALITY OF STRATEGIC ANALYSIS

     ANGELA WILKINSON, PROGRAMME DIRECTOR OF THE FUTURES DIRECTORATEAT THE SMITH SCHOOL OF ENTERPRISE AND THE ENVIRONMENT

    27 CASE STUDY 04

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    40 YEARS OF SHELL SCENARIOS

    Scarce resources, surging demand and the impact of climate change makeenergy choices critical to the planet’s future.

    ENERGY SCENARIOS TO 2050 AND THE THREE HARD TRUTHS.

    Shell’s Energy Scenarios to 2050  gainedinternational renown for their unflinchingacceptance of the harsh realities facingthe world and the company’s decisionto support a future that embraced moresustainable energies and technology.

    The scenarios, named Blueprints andScramble , were published in 2008 andmarked a watershed in Shell’s scenariodevelopment for a number of reasons.First, the team invested in the developmentof a highly detailed (in-house) WorldEnergy Model to quantify the scenariooutcomes in a coherent granular form;

    then it considered behavioural choicesmade by human beings, from decision-makers in government to wider societyand consumers; and finally it acceptedcertain incontrovertible truths about the world’s energy system.

     Although created for Shell’s businesses,the relevance and immediacy of EnergyScenarios to 2050  also made an impacton policymakers in the European Unionand elsewhere.

    Recognising that Shell was consideredknowledgeable about energy matters (butnot given the same recognition externallyfor environmental issues), the Scenarios

    Team – led by Jeremy Bentham, Headof Scenarios, Strategy and BusinessDevelopment – involved environmentalspecialists at MIT, knowing this would addsignificant credibility to the scenarios.

    “MIT ran our numbers through theirclimate system,” said Martin Haigh,Senior Energy Adviser. “This was not aneasy process. But it gave us credibilityon the environment story and we wa ntedthese scenarios to have a global impact.”

    THE WORLDNEEDS TO REDUCECARBON EMISSIONSTO COMBATCLIMATE CHANGE

    SHELL’S ENERGY SCENARIOS TO 2050  GAINED INTERNATIONAL RENOWNFOR THEIR UNFLINCHING ACCEPTANCEOF THE HARSH REALITIES FACINGTHE WORLD AND THE COMPANY’SDECISION TO SUPPORT A FUTURETHAT EMBRACED MORE SUSTAINABLEENERGIES AND TECHNOLOGY

    THE THREE HARD TRUTHS

    01  The world’s population and prosperity is growingrapidly and with it an insatiable demand for energy.

    02  The conventional resources to meet that demand are

    finite, and alternative sources of energy are vital and will struggle to keep pace with demand growth.

    03  The world needs to reduce carbon emissions tocombat climate change.

    29CASE STUDY 04

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    40 YEARS OF SHELL SCENARIOS

    TAKING A STAND

    In signalling a preference for the basicoutcomes of the Blueprints scenario,Shell continued to signal its public beliefthat efforts to address greenhouse gasemissions and other environmentalpressures from rising energy demand were crucial. Blueprints imagines anenergy future driven by a patchworkof emerging coalitions and interests thatresults in policies to manage energydemand, cross-border alignment tocreate incentives for the developmentof low-carbon energy resources, andthe deployment of technologies which would moderate emissions.

    The alternative, Scramble , portrayeda future based on states prioritisingtheir own energy security over allother considerations.

    There were those within the ScenariosTeam and Shell who believed thecompany should remain neutral whenit came to the scenarios. And, indeed,the company aims to be successfulno matter how the future unfolds. But,given the significance of the hard truthsconfronting the world’s energy system,Shell’s former CEO, Jeroen van der Veer,announced that the outcomes imaginedin the Blueprints scenario would producea more sustainable future.

    “Backing Blueprints was controversial,” said Jeremy Bentham. ”But Shell is part of the world and ultimately a more sustainable world is a better place to do business.”

    SCRAMBLE  SCENARIO

    In the Scramble  scenario, immediate pressures to achieve energy

    security trump policies to manage demand. National governments

    focus on securing sufficient energy supplies, resulting in a resource

    scramble among nations. Governments neglect action to address

    climate change until major events like floods and severe storms

    prompt response.

    Action to tackle energy demand and promote efficiency comes only

    when supplies become tight. Continued economic growth can only

    be achieved with better management of resources. The energy system

    in Scramble  is disjointed, as the world is continually trying to catch up

    with energy demand by pursuing the easiest energy available.

    BLUEPRINTS  SCENARIO

    In the Blueprints scenario, action to manage energy use is driven by

    concerns about the available supply of resources, but also by environmental

    concerns and the commercial opportunities presented by a transformation

    of the world’s energy system.

    Groups with intertwined interests increasingly join together to drive better

    economic and lifestyle possibilities. After being adopted at a local level,

    these become part of the mainstream wherever interests coincide.

    A patchwork of policies drives businesses to lobby for clear regulations

    and encourages early adoption of new technologies and innovation.

    MIT RAN OUR NUMBERS THROUGH THEIRCLIMATE SYSTEM. THIS WAS NOT AN EASYPROCESS. BUT IT GAVE US CREDIBILITY ONTHE ENVIRONMENT STORY AND WE WANTED

    THESE SCENARIOS TO HAVE A GLOBAL IMPACT.

    BACKING BLUEPRINTS  WAS CONTROVERSIAL.BUT SHELL IS PART OF THE WORLD ANDULTIMATELY A MORE SUSTAINABLE WORLDIS A BETTER PLACE TO DO BUSINESS

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    THE REQUIRED COMBINATION OFANALYTICAL CAPACITY AND POWERSOF IMAGINATION IS A CHALLENGE INITSELF, BOTH FOR THE ORGANISATIONAND FOR THE PEOPLE INVOLVEDEWALD BREUNESSE, FORMER SCENARIOS TEAM MEMBER

    33CASE STUDY 05

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     When the world recalls South Africa’s transition to majority rule in the 1990s after decades of apartheid, theypicture Nelson Mandela leaving Robben Island prison and voters queuing to cast the ballots that would usher inthe country’s first multi-racial government.

    Few picture a serene resort in a wine-growing region near Cape Town where South African leaders metover six months in 1991–92 to createfour scenarios used by a nation at acrossroads to create a new future.

    Shell’s scenarios practice was theinspiration for that series of meetings where 22 politicians, business leaders,trade unionists, academics and communityactivists from across the political

    spectrum convened. The leaders wereblack and white, from the left and right,members of the opposition and theapartheid-era establishment.

    Together their compelling storylinesmapped the path to a new South Africaat the Mont Fleur Conference Centre, with a helping hand from AdamKahane, a former member of Shell’sScenarios Team in London.

    The meetings were the brainchildof Professor Pieter le Roux, from theopposition-aligned University of the Western Cape. Le Roux wanted to applyShell’s scenario planning methods tocreate a set of stories about how South Africa might develop as it attemptedto throw off the shackles of racism,inequality, hatred and mistrust fosteredby the adoption of apartheid in 1948.

    Le Roux turned to Adam Kahane to leadthe meetings in what has become knownas the Mont Fleur Scenarios Exercise .

    The meetings took place against abackdrop of hope and fear. In 1990,South Africa had lifted its ban onthe African National Congress (ANC),releasing Mandela after 27 yearsin prison. A year later PresidentF.W. de Klerk repealed the last

    FEW PICTURE A SERENE RESORTIN A WINE-GROWING REGIONNEAR CAPE TOWN WHERE SOUTH

    AFRICAN LEADERS MET OVER SIXMONTHS IN 1991–92 TO CREATEFOUR SCENARIOS USED BY ANATION AT A CROSSROADSTO CREATE A NEW FUTURE

    THE MEETINGSTOOK PLACEAGAINST ABACKDROP OFHOPE AND FEAR

    1992-2002THE FOUR MONT FLEUR SCENARIOS IMAGINEDHOW EVENTS MIGHT UNFOLD IN THE DECADE1992–2002. THEY WERE CALLED: OSTRICH , LAMEDUCK , ICARUS  AND FLIGHT OF THE FLAMINGOS .

    SCENARIOS INSPIRED NEW VISIONSFOR POST-APARTHEID SOUTH AFRICA.

    35CASE STUDY 05

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    remaining apartheid laws, multi-partytalks commenced and internationalsanctions were lifted.

    But the country’s future was precariouslypoised. Fighting raged between the ANC and the Zulu Inkatha mo vementand the country remained gripped bydemonstrations and police crackdowns.

    The first three storylines were prophetic warnings abou t what could ha ppenin South Africa if the wrong decisions were taken, whilst the fo urth was a vision for a b etter future.

    Ostrich was a future where a white-minority government disregards the crisisand refuses to negotiate. Lame Duck , where negotiations limit the government’spowers, preventing it from dealing withthe country’s problems. Icarus painted thepicture of a new democratic government which ignores prudent fi nancialmanagement and crashes the economy.Flight of the Flamingos was the story ofSouth Africa building foundations carefullyto develop incrementally, tog ether.

    The 16-page summary of the workappeared in the country’s newspapersand the Mont Fleur scenarios notonly shifted people’s thinking but alsotheir actions.

    Trevor Manuel, who took part as an ANC representative in the Mont Fleurmeetings and went on to serve asMinister of Finance, acknowledged thatthe scenarios played a significant rolein the country’s economic and politicaltransition. The economic discipline ofthe new government enabled the annualreal rate of growth of the South Africaneconomy to jump from 1% in 1984–1994 to 3% in 1994–2004.

    “It’s not a straight line from Mont Fleurto our current policy,” he said in 2000.“It meanders through, but there’s afair amount in all that going back toMont Fleur. I could close my eyes nowand give you those scenarios just likethis. I’ve internalised them, and if youhave internalised something then youprobably carry it for life.”

    Kahane was not the only Shell expert toplay a critical role in creating scenariosfor a South Africa in transition. AfterPierre Wack retired from Shell in 1980,he started to work as a consultant toClem Sunter, the head of scenarioplanning for Anglo American, the largestmining company in South Africa.

    In 2010, Sunter observed howinfluential the Mont Fleur scenarioshad been. Reflecting on South Africa’snegotiated transition to democracy hesaid: “…take a bow, all you who wereinvolved in the Mont Fleur initiative. You may have changed our history ata critical juncture.”

    LE ROUX WANTED TO APPLY SHELL’S SCENARIOPLANNING METHODS TO CREATE A SET OF STORIESABOUT HOW SOUTH AFRICA MIGHT DEVELOP AS ITATTEMPTED TO THROW OFF THE SHACKLES OF RACISM,

    INEQUALITY, HATRED AND MISTRUST FOSTERED BY THEADOPTION OF APARTHEID IN 1948

    TAKE A BOW, ALL YOU WHO WERE INVOLVEDIN THE MONT FLEUR INITIATIVE. YOU MAY HAVECHANGED OUR HISTORY AT A CRITICAL JUNCTURE

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    IF MANAGERS OPERATE WITHIN DEFINEDCONFINES, THEY NO LONGER TEND TO SEESOLUTIONS OUTSIDE THEIR OWN VIEW OF THE

    WORLD. SCENARIOS CAN REMOVE THE BLINKERSFROM MANAGERS’ EYES AND SHOW THEMALTERNATIVE WINDOWS ON THE WORLD.PIERRE WACK, THE ‘FATHER OF SCENARIOS’

    39CASE STUDY 06

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    SINGAPORE IS PROBABLY THE ONLYCOUNTRY IN WHICH SCENARIO PLANNING

    IS USED COMPREHENSIVELY ACROSS ALL LEVELS OFGOVERNMENT TO PLAN STRATEGICALLY FOR THE FUTUREThe city state of Singapore may be small but it thinks big. Smaller than New York City, it has come a long

     way in a short time since independence in 1965.

    Despite few natural resources, it enjoysone of the highest standards of livingin the world. It’s also the easiest placeon the planet to do business. That maybe in no small part due to the country’scommitment to planning.

    Singapore’s government started usingscenario planning in 1991, drawinginspiration and support from Shell.Two Singaporean officials spent time with Shell in London studying scenarioplanning. In 1992, the country producedits first scenarios and in 1995 Singaporeset up a Scenario Planning Office. Firstused in the Ministry of Defence, scenarioplanning spread across government.

    “The scenario planning method usedby Shell helped it to deal with the 1973oil shock,” said Peter Ho, retired Headof Singapore’s Civil Service and nowSenior Advisor to Singapore’s Centre forStrategic Futures (CSF), an agency at theheart of government. “Everyone knew

    about that, certainly the cognoscentidid. It was the inspiration, if you will, forSingapore to look at scenario planning.”

    Today scenario planning is part ofthe DNA of Singapore’s governmentand public service. Planning units inministries and agencies are familiar with its key vocab ulary and concepts.Singapore produces national scenariosevery three years, in addition toscenarios on topics ranging fromclimate change to new media.

    “Singapore is probably the only countryin which scenario planning is used

    comprehensively across all levels ofgovernment to plan strategically for thefuture,” added Peter Ho.

     With a strong economy d riven byelectronics manufacturing and financialservices, this south-east Asian “tigereconomy” is no stranger to shocks ina globalised world. It has weathered

    the 1997 Asian Financial Crisis, theafter-effects of the terrorist attacks onSeptember 11, 2001, the 2003 SARS virus outbreak, and the recent financialand economic downturn.

    Singapore appears to have turnedawareness about its vulnerabilityto external events into a competitiveadvantage.

    “We have found that the conversationsgenerated by the scenario planningprocess are as useful as the output,because they build an anticipatorymindset, challenge prevailing

    assumptions, and sensitise our peopleto the larger national challenges andopportunities,” said Peter Ho.

    SCENARIO PLANNING: PART OF SINGAPORE’SDNA FOR TWO DECADES.

    19731991

    1992

    THE SCENARIO PLANNINGMETHOD USED BY SHELLHELPED SINGAPORE TO DEAL WITH THE 1973 OIL SHOCK 

    SINGAPORE’S GOVERNMENTSTARTED USING SCENARIOPLANNING IN 1991, DRAWINGINSPIRATION AND SUPPORTFROM SHELL 

    SINGAPORE PRODUCEDITS FIRST SCENARIOS

    1995SINGAPORE SET UP A SCENARIOPLANNING OFFICE. FIRST USEDIN THE MINISTRY OF DEFENCE,SCENARIO PLANNING SPREAD ACROSS GOVERNMENT

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    SHELL’S TRACK RECORD IN ANTICIPATINGMAJOR STRUCTURAL CHANGES IN THEGLOBAL ENERGY MARKETS HAS SUBSTANTIALLY

    ENHANCED THE CREDIBILITY OF SCENARIOANALYSIS WITHIN THE GROUPPETER CORNELIUS, FORMER SHELL SCENARIOS TEAM MEMBER

    43

    TOUGH CHOICES

    CASE STUDY 07 

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    Imagine Africa in 2025. The continent is losing its fight against HIV/AIDS.

    Homes stand empty, poverty is growing,instability is rising and AIDS orphans with little hope and even less to loseare mourning a missing generation ofparents. Disunity threatens the continent’seconomic, social and political fabric.

    The 2005 United Nations report AIDSin Africa: Three Scenarios to 2025  madeit clear that there was nothing inevitableabout this future.

     With Shell’s scenario dev elopmentexperience, the UN was able to outlinethree compelling but contrasting visionsfor Africa, highlighting the complex anddynamic connection between health,economic development, security, peaceand stability.

    “The AIDS epidemic acts as an overarchingsymbol of many problems facing Africaand the world,” the report said.

    The Joint United Nations Programmeon HIV/AIDS (UNAIDS) was able toinvestigate which response to the crisis would create the best outcome for Africa, Africans and the wider world by 2025.

    One scenario, named Times andTransitions , outlined a best-case scenarioin which the number of people living with HIV and AIDS almost hal vesbetween 2003 and 2025 despite a 50%increase in the continent’s population. A transformation in how Africa and the world tackle health, development, tradeand security makes this possible.

    Traps and Legacies is a worst-casescenario in which Africa remains firmlyin the grips of HIV and AIDS, facingpoverty and instability. Despite the goodintentions of African leaders and donors,the response to the crisis is short-term,fractured and fails to deliver a lastingsolution. The epidemic continues to costmillions of lives and sparks a rise of morethan 50% in the number of people living with HIV and AIDS across the continent.

    Tough Choices offered a halfway housebetween the other two scenarios. It isless bleak than Traps and Legacies butless hopeful than Times and Transitions. African leaders take tough measuresto combat the long-term spread of

    the disease as part of a long-termdevelopment strategy.

    T I   ME  S A  ND T R 

    A  N S I  T I   O N S 

    TRAPS AND LEGACIES

    TOUGH CHOICES

    THE AIDS EPIDEMIC ACTS ASAN OVERARCHING SYMBOLOF MANY PROBLEMS FACING

    AFRICA AND THE WORLD

    THE 2005 UNITED NATIONS REPORT AIDS IN AFRICA:THREE SCENARIOS TO 2025  MADE IT CLEAR THAT THEREWAS NOTHING INEVITABLE ABOUT THIS FUTURE

    SOWING SEEDS FOR THE UNITED NATIONS’LANDMARK AIDS IN AFRICA SCENARIOS.

    45

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    THE OUTLOOKS THE SCENARIOS TEAMOUTLINE DO NOT NECESSARILY MAKE FORCOMFORTABLE READING, FORCING SHELLMANAGERS AND EXTERNAL DECISION-MAKERS

    TO CONFRONT DIFFICULT TRUTHS JEREMY BENTHAM, HEAD OF SCENARIOS, STRATEGY AND BUSINESS DEVELOPMENT, ROYAL DUTCH SHELL

    47 CASE STUDY 08

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    The catastrophic oil spill at the Macondo BP exploration well in theGulf of Mexico damaged the oil and gas industry’s reputation for safeand reliable operations and compounded a crisis of confidence deeplyembedded by the 2008 financial crisis.

    REBUILDING TRUST, AT THE HEARTOF MACONDO SCENARIOS 2010.

    In 2005 Shell Scenarios had identifiedlow levels of trust in global business,highlighting the company’s existingconviction that transparency andaccountability were vital to theindustry’s future.

    The Signals & Signposts scenarios update

    published in 2011 noted the fallout fromthe Macondo oil spill, drawing on earlierscenarios that explored market concernsabout security and trust in the wake of theSeptember 11 attacks and the collapse ofUS energy giant Enron in 2001.

    The earlier scenarios – Global Scenariosto 2025  – were published in 2005.These provided a natural starting pointfor the Scenarios Team to frame itsdiscussions about the Gulf oil spill.

    “After the spill, we realised theearlier work provided a valuable setof lenses through which we could view the events unfolding in the Gulf,in particular the public, political andregulatory responses in the UnitedStates,” said Adam Newton from theShell Scenarios Team.

    The Open Doors scenario describedhow transparency and openness cancreate a relationship – between industry,regulators, government and the public –built on mutual trust and earned respect.

    “The approach contends that if weare transparent as an industry and we welcome attention and scrutiny acrossour operations and procedures, we

    TRANSPARENCY& OPENNESS

    PUBLIC, POLITICAL& REGULATORYRESPONSE

    MUTUAL TRUST& GROWINGRESPECT

    THE GLOBAL SCENARIOS TO 2025 WERE:

    LOW TRUST GLOBALISATION A world marked by rapid regulatory change, overlapping jurisdictions,conflicting laws and intrusive checks and controls.

    OPEN DOORS A world of regulatory harmonisation, voluntary best practice codesand close links between investors and civil society.

    FLAGS A world characterised by regulatory fragmentation, nationalisticpreferences and conflict.

    can create a new relationship built ontrust,” added Newton. “You can draw aline between this approach and Shell’sbusiness response to the Macondo crisis, which was to open our company upfor close examination with the aim ofdemonstrating our credibility.”

    The Scenarios Team held internal workshops in The Hague and Londonbefore heading to Louisiana and

     Washington DC to assess local impacts,political reactions and responses to thecrisis. In all, more than 200 internal andexternal stakeholder opinions were soughtover a six-week period as oil continued toflow from the stricken deep water well.

    “Scenario thinking can bring objectivityto a discussion. It’s about being open,collaborative and helping others to shape

    AFTER THE SPILL, WE REALISEDTHE EARLIER WORK PROVIDEDA VALUABLE SET OF LENSESTHROUGH WHICH WE COULDVIEW THE EVENTS UNFOLDINGIN THE GULF, IN PARTICULARTHE PUBLIC, POLITICAL ANDREGULATORY RESPONSES IN

    THE UNITED STATES

    49CASE STUDY 08

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    our thinking – it reduces ‘no-go areas’for discussion and helps to make sure we have a business response based onunderstanding others and not just a narrow view of the business impact,” said Newton.

    In considering the potential long-termimpact of the crisis in trust, Signals &Signposts outlined two plausible visionsof the future.

    One was dubbed High Wire .It represented the default position foran entire industry judged accordingto the standards of its worst-performingoperators. It pointed to a low trust world with high levels of compliance but littleincentive for industry collaboration.It was marked by knee-jerk and politicisedresponses to safety incidents, with stiffpenalties for accidents hitting the entireindustry and driving up costs. A low trust

    environment was perpetuated, in whichthere was little motivation for operatorsto strive to achieve higher than averageindustry operating standards.

    The Safety Net  scenario, in contrast,pointed to an industry model based onopen co-operation and partnership.Trust was earned and sustained byadopting greater openness andtransparency across operations andin communications. The principle oftransparency underpinned a newapproach, bringing together thetechnical expertise largely developedin the private sector with the regulatoryexpertise of the public sector.

    This underpinned a stronger relationship with government and regu lators, as well as increasing so cial acceptanc e.Collaboration on standards drove

    greater investment in joint industryresearch and development, improvingoperations and reliability, and definingmore effective responses shouldan incident occur. Gradually toughself-regulation became the norm andcompliance did not depend exclusively

    on government regulation.

    Signals & Signposts not only highlightedsignificant continuity in the work of theScenarios Team from one decade to thenext, it also reaffirmed the company’sconviction that collaboration betweencivil society and the public and privatesectors was vital to address economic,energy and environmental challenges.

    THE APPROACH CONTENDSTHAT IF WE ARE TRANSPARENTAS AN INDUSTRY AND WEWELCOME ATTENTION ANDSCRUTINY ACROSS OUROPERATIONS AND PROCEDURES,WE CAN CREATE A NEWRELATIONSHIP BUILT ON TRUST

    SCENARIO THINKING CAN BRING OBJECTIVITYTO A DISCUSSION. IT’S ABOUT BEING OPEN,COLLABORATIVE AND HELPING OTHERS TOSHAPE OUR THINKING.

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    OUR GOAL IS NOT TO PREDICT THEFUTURE BUT TO ENABLE POLICYMAKERSTO MAKE RICHER AND BETTER DECISIONSINVOLVING THE FUTURE, AS A RESULT OFHAVING A DEEPER GRASP OF KEY DRIVERSAND KEY UNCERTAINTIES

     JEREMY BENTHAM, HEAD OF SCENARIOS, STRATEGY AND BUSINESS DEVELOPMENT, ROYAL DUTCH SHELL

    53CASE STUDY 09

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    AN URBAN PLANET IN SEARCH OFENERGY, WATER AND FOOD SECURITY.

     We are living in an urban age. With millions leaving the countryside for the bright lights of cities like Shanghai,Rio, Lagos and Delhi, rising demand for energy, water and food is set to be most acute among our skyscrapersand slums. The city is also where the brightest ideas may emerge about investing, innovating and regulating fora sustainable future.

    In 2011, Shell embarked on a projectto explore innovative ways to ensuregreater water, food and energy security.

    Understanding the complex connectionsbetween energy, water and food – theso-called “stress nexus” – is crucial tomaking the most of the globe’s finiteresources. It is also critical to avoidingdrought, food shortages and a declinein our quality of life in the decadesahead. At the same time, understandingthe complex connection would deepenShell’s understanding of potentialcommercial risks and opportunities.

     With 75% of the world’s population set to

    live in cities by 2050 – up from around50% today – rising prosperity is expectedto drive demand for ener gy, goods andservices, particularly in urban areas.

    “Our cities are likely to be the cruciblesof the biggest challenges and opportunitiescreated by our need to innovate, investand regulate for a sustainable future,”

    says Jeremy Bentham, VP GlobalBusiness Environment.

    Shell’s Scenarios were the starting pointfor the initiative to explore the stress

    nexus. The 2011 Signals & Signposts 

    publication included an examination of wider pressures on the planet’s resources.

    The relationship between energy, water andfood appears simple on the surface. Water

    is needed in almost all forms of energyproduction. Energy is required to transportand treat water. Producing food requiresboth energy and water. But in reality, the

    relationship is far more complex.

    To help unwrap this complexity, in 2011Shell brought together academics andexperts from industry, government and

    SHANGHAIRIO DE JANEIRO

    DELHI

    LAGOS TAIPEI

    SÃO PAULO

    BUENOS AIRESNAIROBI

    BANGALORE

     JAKARTAHO CHI MINH CITY

    CHENNAI

     JOHANNESBURG

    WITH 75% OF THE WORLD’SPOPULATION SET TO LIVE IN CITIESBY 2050 – UP FROM AROUND 50% TODAY – RISING PROSPERITY ISEXPECTED TO DRIVE DEMAND FORENERGY, GOODS AND SERVICES,PARTICULARLY IN URBAN AREAS

    FIRSTLY, WATER IS NEEDED IN ALMOST ALL FORMS OF ENERGY PRODUCTION

    SECONDLY, ENERGY IS REQUIRED TO TRANSPORT AND TREAT WATER

    THIRDLY, PRODUCING FOOD REQUIRES BOTH ENERGY AND WATER

    THE RELATIONSHIP BETWEEN ENERGY, WATER AND FOOD APPEARS SIMPLE ON THE SURFACE:

    IN REALITY, THE RELATIONSHIP IS FAR MORE COMPLEX.

    55CASE STUDY 09

    Y   S   T   E   M   S

    H   I   N   K   I   N   G

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    non-governmental organisations toexamine interconnections between energy,food and water systems and to find ways

    to reduce stresses in the decades ahead.

    The aim was to identify areas wheretargeted investment, planning and creativesolutions would have the most impact.

    Shell turned to Eric Berlow, an expertin mapping complex natural ecosystemsfrom the University of California atBerkeley, to help spearhead analysis of

    the relationship between rising demandfor energy, water and food.

    Using network analysis, the relationship was mapped in a nexus revealing

    thousands of potential linking features.“Participants in the exercise emerged fromthree days locked in a small windowlessroom where the nexus mapping took

    place in a state of existential despair,”said Adam Newton, Project Manager forthe Scenarios Team and the leader of thestress nexus working group.

     Approximately 20 core issues ultimatelyemerged as central and influentialfactors in the nexus. These were split

    into six categories: Smart & Sustainable

    Design; Technology Innovation; Policy& Pricing; Natural Resource Nationalism;Other Constraints; and Growth in

    Population & Prosperity.

    Two of the biggest policy levers in thenexus appear to be smart and sustainableurban design and emissions regulation.

    “With cities producing up to 80% ofCO2 emissions it’s clear that smarterurban development is required to givethe world more compact, connected,

    efficient cities with secure access to waterand food, integrated mobility and effectivemanagement and reuse of waste streams,”

     Adam Newton commented.

    Between 2000 and 2040 it is est imatedthat over $300 trillion of investment will berequired for city infrastructure according

    to a 2010 report for the WWF. That will accompany phenomenal growth incities in China, India, the US, Nigeria,

    Bangladesh and Brazil.

    Indeed, with the world’s population setto grow from around 7 billion in 2011 to9 billion in 2050, the equivalent of adding

    another China and another India to the world, it will be challenging to meet basicneeds for water, food and energy.

    If current water consumption trends

    continue, the world could face a 40%shortfall between global freshwaterdemand and supply by 2030. At the sametime, there will be 50% growth in food

    needs. Oxfam estimates that stresses onthe planet could lead to a doubling infood prices by 2030.

    Shell’s Scenarios indicate that latentenergy demand could almost triple in thefirst half of this century, while “business

    as usual” production would only grow by

    50%. This large potential gap will needto be closed by some combination ofextraordinary supply growth or demand

    moderation. Shell refers to this gap asa “zone of uncertainty”. As it appliesto energy, so too could the dynamicsof water and food resources behave

    according to the same model as theplanet’s population balloons. 

    WITH CITIES PRODUCING UP TO 80% OF CO2 

    EMISSIONS IT’S CLEAR THAT SMARTER URBANDEVELOPMENT IS REQUIRED TO GIVE THE WORLDMORE COMPACT, CONNECTED, EFFICIENT CITIES...

    SHELL’S SCENARIOS INDICATE THAT LATENT ENERGYDEMAND COULD ALMOST TRIPLE IN THE FIRST HALFOF THIS CENTURY, WHILE ‘BUSINESS AS USUAL’PRODUCTION WOULD ONLY GROW BY 50%

    ZONE OFUNCERTAINTY 

     S T  R E  S  S 

     N E X  U  S 

       S   Y   T   H

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    PEOPLE ACROSS THE ENERGY INDUSTRYAND BEYOND HAVE FOLLOWED SHELL’SEXAMPLE TO MODEL WHAT MIGHT BE

    PLAUSIBLE IN THE FUTURESIR DAVID KING, DIRECTOR OF THE SMITH SCHOOL OF ENTERPRISE AND THE ENVIRONMENT AT THE UNIVERSITY OF OXFORD

    59CASE STUDY 10

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     With growth in the world’s population, rapid urbanisation and risingprosperity exerting more pressure on the world’s energy, food and waterresources, we have entered a new era of rising anxiety and dissatisfaction.

    ERA OF VOLATILE TRANSITION

    DEMANDS NEW APPROACH.

     As our planet grows m ore prosperous,urban and connected, this pressure onresources is challenging us all to findnew ways to meet humanity’s risingaspirations in a sustainable fashion.

    These 21st century economic, social,political and environmental pressures arethe focus of Shell’s latest scenarios work,to be released publicly in 2013.

    In 2011, Shell published Signals &Signposts, a companion piece to the2008 Energy Scenarios to 2050 . Signals& Signposts was the starting pointfor Shell to examine different ways totackle these stresses in the global system.Signals & Signposts suggested that these

    pressures made industrial and socialtransformation inevitable.

    Signals & Signposts not only reflectedthe impact of the global economic andfinancial crisis but also included anexamination of the wider pressures onthe planet’s resources. It made clearthat we have entered an “era of volatiletransitions”, with very different possiblepathways ahead.

    PATHWAY LENSES

    Signals & Signposts was the genesis ofthe new lens scenarios. Pathway Lenses,for example, explore what happens when gaps emerge between what people want and what they have. Closing that

    gap could require economic, social,environmental or political reform to curbfinancial turbulence, growing socialinequality and social tension.

     A widening gap fuels anxiety anddissatisfaction. This in turn createsopportunities for change, for new waysof doing things to close that gap.

    Closing the gap can be hampered orencouraged by what we call inhibitorsand facilitators. Ignorance, interestsand ideology, as Nobel-prize winningeconomist Paul Krugman points out,can prevent transitions towards a moresustainable future.

     We see two archetypal pathways inthe face of these challenges: Room forManoeuvre and Trapped Transitions.These give us new lenses on thedynamics of multiple transitions.

    Not only are we living in times of volatility and transition. We are alsoliving in times of paradox.

    PARADOX LENSES

     Aspirations have grown in line withrising prosperity as millions emerge frompoverty around the world. But institutionalinadequacy, inequality and insecurity arethrowing up challenges which must beovercome to maintain and extend public well-being. For example, rising prosperityin developing countries coupled withstagnation for many in developedcountries is fuelling tension betweenthe most advantaged and the widerpopulation. It is also creating resourcestresses that threaten to undermine someof the very benefits of prosperity. We callthis the Prosperity Paradox.

    The scale of global challenges alsocreates a Leadership Paradox, as

     widespread stresses require coordinationbetween many different groups toachieve progress, but those same groupshave different vested interests which mayblock the pace of reform and progress.

     We also face a Connectivity Paradox.Technology is unleashing greaterconnectivity and individual creativity while also encouraging more herdbehaviour and putting intellectualproperty at risk.

    These new lenses suggest thataddressing the challenges of the21st century will be challenging andoften uncomfortable. It may requiremany people and organisations toreconsider their own vested interests,to forge innovative partnerships andto move towards more effectivelyaccommodating the best interests ofothers as a necessary componentof their own flourishing.

    LEADERSHIP PARADOX

       C   O   N   N   E   C   T   I   V   I   T   Y   P   A   R   A   D   O   X

    P R  O S P E R I  T Y P A R A D  OX 

    AS OUR PLANET GROWS MORE PROSPEROUS,URBAN AND CONNECTED, THIS PRESSURE ONRESOURCES IS CHALLENGING US ALL TO FINDNEW WAYS TO MEET HUMANITY’S RISINGASPIRATIONS IN A SUSTAINABLE FASHION

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    63TEAM PROFILES

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    40 YEARS OF SHELL SCENARIOS

    Peter Schwartz has become one of the world’s mostrenowned futurists, business strategists and scenarioplanners. A prolific author and lecturer, the Financial Times described him as a “gem, an original, a fizzing streamof ideas and anecdotes.”

    His first book, The Art of the Long View , published in1991, is considered a seminal work on scenario planning.His other books include When Good Companies Do BadThings, an examination of corporate social responsibilityand China’s Future , which describes different scenariosfor Asia’s biggest economy. In addition to writing seminalbooks on the future, he has served as a script consultantto Hollywood films including Minority Report, Deep Impactand War Games.

    Before joining Shell, he directed the Strategic EnvironmentCentre at SRI International, an independent, non-profitresearch institute conducting client-sponsored researchand development for government agencies, commercialbusinesses, foundations and other organisations.

    After his career at Shell, he co-founded the GlobalBusiness Network (GBN), a leading organisationfocused on scenario thinking and planning. He has ledprogrammes for corporations, governments and non-profitinstitutions. His research and s cenarios work spans energy,

    environment, technology, telecommunications, media,entertainment, aerospace and national security. He has aB.S. in aeronautical engineering and astronautics and anhonorary doctorate from Rensselaer Polytechnic Institute.

    PETER SCHWARTZ

     JOOP DE VRIES

    KEES VAN DER HEIJDEN

     JOSEPH JAWORSKI

    FORMER HEAD OF SCENARIOS,STRATEGY AND BUSINESS DEVELOPMENT

    FORMER HEAD OF SCENARIOS,STRATEGY AND BUSINESS DEVELOPMENT

    FORMER HEAD OF SCENARIOS,STRATEGY AND BUSINESS DEVELOPMENT

    FORMER HEAD OF SCENARIOS,STRATEGY AND BUSINESS DEVELOPMENT

    After Shell Joop de Vries went on to become an expertin qualitative aspects of scenario planning and culturalresearch, working in Paris, Heidelberg and Maastricht.

    During his time at Shell he held management positions atShell Centre in London in supply, oil trading, competitivepositioning and marketing. Introduced to Shell scenariosearly in his career, he worked with Pierre Wack andlater succeeded Peter Schwartz as head of the ScenariosTeam. After working with the Scenarios Team he becamemarketing director in the Netherlands and coordinator ofShell’s activities in Central America, leaving Shell in 1996.

    He joined two Paris-based cultural research institutes,the International Research Institute on Social Change andCofremca Sociovision, providing research in marketingand for scenarios development. He later moved toHeidelberg in Germany to work on futures projects

    for Sinus Sociovision in consumer electronics, humanresources, sustainability, media, housing, health care,politics and lifestyles. He moved to Maastricht andpublished a book in 2006, Whose Europe Wins,  lookingat values and aspirations in European society.

    He studied chemistry in Nijmegen, worked at RutgersUniversity (N.J.) and obtained his doctorate in 1974with a dissertation on physical chemistry.

     Joseph Jaworski went on to become a leading expert on

    transformation leadership after leaving Shell. He started hiscareer as a lawyer at a large US law firm, where he was asenior partner and member of the executive committee.

    A co-founder of the Global Leadership Initiative, heworked for many years on the transformation of large-scaleorganisations. He wrote critically acclaimed books ontransformational leadership, including Synchronicity .

    In 1980, Jaworski founded the American Leadership Forum,which focused on promoting civic leadership in the UnitedStates. In 1990 he joined Shell in London to head theirteam of scenario planners. At Shell he radically altered theway the company looked at scenarios, focusing not only onpredicting futures but on creating better ones. After leavingShell he returned to the United States to join the Board ofGovernors at the MIT Center for Organizational Learningand co-founded the Society for Organizational Learning.

    Kees van der Heijden went on to write seminal scenariosand become an associate fellow at Oxford’s Said BusinessSchool after a long and distinguished internationalcareer at Shell.

    After joining Shell in 1957 he spent many years abroadin operating companies in Manila, Singapore andCuraçao, mostly in activities concerned with commercialplanning, economics, and corporate planning andstrategy. He also headed Shell’s internal strategicconsultancy group, assisting management teams instrategy development and implementation.

    He is the author of the seminal Scenarios: The Art ofStrategic Conversation and co-author of The Sixth Sense:Accelerating Organizational Learning with Scenarios .He became Professor Emeritus of Strategic Managementat the Graduate Business School of Strathclyde University,Glasgow and a leading expert on the emergence ofinstitutional strategic thinking and learning.

    65TEAM PROFILES

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    40 YEARS OF SHELL SCENARIOS

    ROGER RAINBOW FORMER HEAD OF SCENARIOS,STRATEGY AND BUSINESS DEVELOPMENT

    Roger Rainbow went on to become a leading consultanton scenario planning and strategy after leaving Shell.He specialised in how to help leaders gain deeperunderstanding of the relationship between strategyand the world around them.

    After retiring from Shell in 1999, he consulted witha number of leading companies around the world.His worked as Strategic Planning Advisor to ControlRisks Group, a leading business risk consultancy, aswell as on the International Advisory Board of EnergyIntelligence Group. He also served as a Fellow of theWindsor Leadership Trust, a UK-based charity that aimsto develop leadership skills at all levels of society.

    Rainbow joined Shell in 1970 after attending businessschool and teaching for four years in Tanzania. He workedfor Shell in the Philippines, Brunei, Turkey, Venezuela, andAustralia as well as in London. He joined the ScenarioPlanning Team as Head of Energy before taking over asthe head of the team in 1993.

    He gained a BA in Physics from Oxford University, ateaching diploma from Makerere College, Uganda andan MBA from London Business School.

    GED DAVISFORMER HEAD OF SCENARIOS,STRATEGY AND BUSINESS DEVELOPMENT

    Ged Davis led a large number of scenarios projectsduring his long career and tackled issues including AIDS,sustainable development and climate change.

    He was the director of the UNAIDS ‘AIDS in Africa’scenario project from 2002 to 2003 and was involvedin scenarios on the future of sustainability for the WorldBusiness Council for Sustainable Development. He wasalso a facilitator of an emissions scenario for the UN’sIntergovernmental Panel on Climate Change (IPCC).

    After leaving Shell he served as managing directorof the World Economic Forum. He was responsible forglobal research, scenario projects and the design of theannual Forum meeting at Davos, which brings togethercorporate, government and non-profit leaders to shapethe global agenda.

    He served as a member of the InterAcademy CouncilPanel on Transitions to Sustainable Energy, a directorof Low Carbon Accelerator Limited, a governor of theInternational Development Research Centre in Ottawa

    and a member of the INDEX Design Awards Jury.

    He joined Shell in 1972, spending 30 years at thecompany. He graduated with a degree in MiningEngineering from Imperial College, London and wasawarded postgraduate degrees in Economics andEngineering from the London School of Economicsand Stanford University.

     ALBERT BRESSANDFORMER HEAD OF SCENARIOS,STRATEGY AND BUSINESS DEVELOPMENT

    Albert Bressand, who led Shell’s Global BusinessEnvironment (GBE) department from 2003–2006,

    was responsible for designing a new generation ofShell Global Scenarios around an enhanced, originalmethodology for risk and opportunity assessment.During his career he also worked as a key adviserto the EU and the French government.

    He was Special Adviser to the EU Commissioner incharge of energy in Brussels and served as EconomicAdvisor to the Minister of Foreign Affairs of France.He also held key positions with the French Institute forInternational Relations and the World Bank.

    As a member of the faculty of the World Economic Forum,he chaired a number of sessions at the Davos AnnualMeetings. He contributed to several major CambridgeEnergy Research Associates (CERA) studies on world energy,notably the CERA Dawn of a New Age scenarios and theSecuring the Future study on EU-Russia gas relations.His work has appeared inForeign Affairs, InternationalAffairs and Le Monde, among other publications.

    He gained advanced degrees in both mathematics

    and engineering at École Polytechnique in Paris, ÉcoleNationale des Ponts et Chaussées and Paris-Sorbonne,and an MPA and a PhD in Political Economy at theKennedy School of Government at Harvard University.

     JEREMY BENTHAMCURRENT HEAD OF SCENARIOS,STRATEGY AND BUSINESS DEVELOPMENT

     Jeremy Bentham, the head of the Shell Scenario Teamsince 2006, has 30 years of experience in the energyindustry and has worked in most of Shell’s main businesssectors. An Oxford University physics graduate, he joinedShell in 1980 following postgraduate experience at theCalifornia Institute of Technology. He also holds a Masters’degree in management from the Massachusetts Instituteof Technology (MIT), where he was a Sloan Fellow from1990 to 1991.

    Following experience in both research and technologyprocess design, Jeremy worked in the areas of manufacturingeconomics, industry analysis and commercial informationtechnology. He then held line management positionscoordinating commercial and production activities ata number of refinery facilities. Subsequently he becamemanager of corporate strategy analysis within the CorporateCentre of the Shell Group, and then led a strategicproject for Shell’s Exploration and Production Business.

     Jeremy joined the leaders hip team of Shell’s gl obalcommercial technology company, Shell Global Solutions,in 1999, with specific responsibility for commercialand strategic developments including new business.He was subsequently appointed as chief executive ofShell Hydrogen. Since January 2006 he has beenresponsible for Shell’s Global Business Environment team,

    which is best known for developing forward-lookingscenarios to support strategic thinking and direction-setting.

     ACKNOWLEDGEMENT

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    40 YEARS OF SHELL SCENARIOS

    TO ALL OUR COLLEAGUES, PAST AND PRESENT, WHO HAVE WORKED ONTHE DEVELOPMENT OF SHELL SCENARIOS,  WE THANK YOU FOR YOURMANY CONTRIBUTIONS. IT IS YOUR CREATIVITY AND INSIGHT THAT MAKEOUR SCENARIOS CREDIBLE AND ENGAGING.

    IT IS YOUR COURAGE TO THINK BEYOND COMFORTABLE BOUNDARIESTHAT ENSURES SCENARIOS HAVE BEEN – AND WILL CONTINUE T O BE– USEFUL STRATEGIC TOOLS WITH WHICH TO FACE THE FUTURE.

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