Shell Urges Shareholders to Reject Activist Climate Plan
(Bloomberg) -- Royal Dutch Shell Plc’s board has urged shareholders to reject a climate resolution filed by Dutch activist investor Follow This in favor of its own energy transition plan, which the company will put to a vote next month.
The Anglo-Dutch major said that the Follow This resolution, which asks Shell to set and publish targets consistent with the goals of the Paris climate agreement, is “redundant” given its own “more comprehensive strategy,” according to a company notice.
Shell upped its climate ambitions in February, saying that it would produce less oil, more gas and slash carbon emissions over the next three decades. The oil major has now presented those ambitions in an energy transition strategy for a non-binding vote by shareholders in May. The plan will be updated every three years, and investors will get an advisory vote every year on Shell’s progress toward the targets starting 2022.
Shell’s goal is to become a “net-zero energy business by 2050” which is aligned with the Paris agreement and “in step with society,” the company said in a statement. It aims to reduce the carbon intensity of all its emissions -- including those produced by its customers -- by the middle of the century. However, the plans have failed to assure climate groups who say they don’t go far enough.
“Shell’s ‘new’ strategy is part of a wider pattern among European oil majors,” Follow This founder Mark Van Baal said in a statement. The company promises net-zero emissions in “the distant future, but doesn’t decrease emissions enough in this decade to be Paris-aligned.”
Follow This has filed resolutions with BP Plc, Equinor ASA, as well as U.S. companies such as Chevron Corp. and ConocoPhillips.
Last month, influential group Climate Action 100+ published an analysis of 159 companies’ climate ambitions -- including Shell’s -- which found that none have fully disclosed how they will eliminate their net emissions.
The Church of England Pensions Board, which engages with Shell on climate matters on behalf of the influential Climate Action 100+ investor group, also said it would vote against the Follow This resolution. But it added it expects to support the activist group’s resolutions “at other companies where progress is not so obvious,” Chief Responsible Investment Officer Adam Matthews said.
While Shell’s transition plan is an important step in its transformation, some aspects of the strategy depend on significant scaling of technologies such as hydrogen and carbon capture, utilization and storage. “These dependencies and uncertainties are all areas for further engagement and will require Shell to provide evidence of delivery of its strategy,” Matthews said.
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