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Windsurfing is a doddle — when one is moving at speed. When momentum stalls, it becomes more of a wobble. Companies that trimmed their sails to the energy transition are experiencing a similar effect. With governments stalling or actively rowing back on pledges, the same enterprises struggle to move forward — and find themselves rocked by controversies.
Fortescue, the $39bn Australian iron ore miner turned hydrogen champion, is the latest to find itself in this spot. In recent weeks, it has parted company with three high-profile executives who had spent little time in their jobs.
Chief executive Fiona Hick left after six months in the role. Her chief financial officer, Christine Morris, barely had time to unpack her boxes. Guy Debelle, who joined from the Reserve Bank of Australia, managed a year in the hydrogen division.
It is unclear what exactly triggered the departure of Hick. Andrew “Twiggy” Forrest, the group’s billionaire founder, executive chair and majority shareholder has hinted at disagreements over green ambitions. Other factors may figure too. The company’s culture is dominated by Forrest. Executives might justifiably have concerns over corporate governance and their latitude for decision-making.
Twiggy’s intransigence towards slow transition could be two sides of the same coin. Fortescue is taking a risky bet, at a time when green fatigue is rife. It has pledged to take final investment decisions on five hydrogen projects this year. Yet demand for hydrogen is in its infancy. Fortescue’s energy division lost $617mn in the year to June 2023.
A similar issue has occurred, in reverse, at Shell. The head of renewable generation, Thomas Brostrom, left after a scaling back of energy transition plans.
Green fatigue imperils the biggest capital project the world has ever seen. Without a timeline from governments that includes milestones, executives, investors and consumers are struggling to make their own plans.
The problem is acute for “brown” companies. Fossil fuel units and much less profitable green divisions are fighting for capital, which has become scarce of late.
Transition cannot be left to start-ups. Only big business, with its huge combined balance sheet and workforce, can make it happen. But the Fortescue mess hints at internal tensions across a swath of multinationals.
