From Morningstar:

Pension funds and asset managers, including Nest and Rathbones, are driving shareholder resolutions at Shell demanding emissions reductions to align with the Paris Climate Agreement. Scope three greenhouse gas emissions will be the target of these resolutions, with the strategy for achieving these targets left up to the board. A record number of 27 leading investors are backing this bold move.

Looking ahead, Shell’s shareholders will vote on these emissions resolutions at the upcoming annual general meeting. Despite previous resolutions at Shell and BP not passing, the resolution calls for a 20% decrease in Net Carbon Intensity by 2030 and a 45% decrease by 2035, with Shell claiming that it believes its climate targets are aligned with Paris Agreement goals.

Disputing Shell’s claims, the activist group Follow This argues that the company’s medium-term emissions reduction targets are not in line with the goal of limiting global warming to 1.5C. Shell seems to have backtracked on some climate commitments last year, such as dropping its plan to reduce oil production each year until 2030, creating waves of pressure on the board and CEO Wael Sawan.

A resolution to give Shell a shareholder mandate to drive the energy transition is facing tough odds to pass but will pile pressure on the board and CEO Wael Sawan. Despite this, the support for this year’s resolution is the strongest seen at any oil major’s AGMs, with expectations of increased votes as more investors follow the lead by voting for change at Shell.

Shareholder rebellion is sparking once again, with a record number of co-filers including big names like Edmond de Rothschild Asset Management and Amundi pledging support. These investors hope to provide incentives for senior management to align business strategies with net-zero scenarios. The focus remains on maintaining climate credibility and long-term interests amidst the fossil fuel era’s decline.

Shell plans to publish its first Energy Transition Strategy update, with an advisory vote at the AGM. The company believes their climate targets align with the Paris Agreement and has outlined counterarguments to the Follow This resolution – a variation of which has been rejected by shareholders annually. Shell’s board continues to advocate for targeted investment in oil and gas to meet global energy demand during the transition to a lower carbon future.

Source: Morningstar



Read more: Shell Shareholders Up the Pressure Over Climate Targets