Pension
funds
and
asset
managers
have
joined
forces
to
file
a
new
shareholder
resolution
at
Shell
(SHEL),
calling
for
the
UK-headquartered
oil
major
to
align
its
emissions
reduction
targets
with
the
Paris
Climate
Agreement.
The
resolution,
led
by
Dutch
activist
group
Follow
This,
has
been
backed
by
27
institutions,
including
workplace
pension
scheme
Nest,
UK
asset
manager
Rathbones,
Brunel
Pension
Partnership
and
French
asset
manager
Amundi.
It
proposes
that
Shell
set
its
medium-term
targets
for
scope
three
greenhouse
gas
emissions
to
be
consistent
with
efforts
to
limit
global
warming
to
1.5C
above
pre-industrial
levels.
Scope
three
emissions,
or
value
chain
emissions,
are
those
from
the
use
of
oil
and
gas
by
consumers
and
make
up
the
bulk
of
the
firm’s
impact.
The
resolution
leaves
the
strategy
for
achieving
these
targets
up
to
the
board.
Mark
van
Baal,
founder
of
Follow
This,
called
the
support
an
extraordinary
step,
showing
how
dedicated
the
investors
are
to
tackling
the
climate
crisis
at
its
source.
He
said:
“This
escalation
of
27
leading
investors
puts
the
call
for
emissions
reductions
by
energy
companies
front
and
centre
for
all
institutional
investors.”
Look
Ahead
to
Shell
AGM
Follow
This,
which
files
similar
resolutions
at
big
oil
firms
every
year,
said
Shell’s
shareholders
will
be
asked
to
support
the
resolution
as
an
advisory
vote
at
this
year’s
annual
general
meeting,
expected
to
take
place
in
London
in
spring.
This
means
that
if
the
resolution
passes,
the
board
will
only
have
to
consider
the
request
rather
than
take
specific
action,
a
move
aimed
at
lowering
the
bar
for
support
from
other
investors
and
voting
proxy
advisors.
Previous
resolutions
did
not
pass
at
Shell
and
BP
AGMs
in
2023.
Shell’s
medium-term
targets
covering
scope
3
emissions
to
decrease
its
Net
Carbon
Intensity,
a
measure
of
emissions
per
unit
of
energy
sold,
by
20%
by
2030
and
45%
by
2035,
compared
to
a
2016
baseline.
The
company
said
that
by
the
end
of
2022,
it
had
reduced
its
NCI
by
3.8%,
the
majority
of
which
was
through
emissions
avoidance
and
reduction
activities.
A
Shell
spokesperson
said
the
firm
believes
its
climate
targets
are
“aligned
with
the
more
ambitious
goal
of
the
Paris
Agreement”.
Climate
Action
Benchmark
But
Follow
This
disputes
the
claim,
citing
the
Climate
Action
100+
benchmark,
which
says
Shell’s
medium-term
emissions
reduction
targets
are
not
aligned
with
the
goal
of
limiting
global
warming
to
1.5C.
The
activist
group
added
that
the
company
does
not
sufficiently
demonstrate
how
it
will
reach
its
targets,
leaving
a
lack
of
clarity
over
how
its
approach
will
contribute
to
a
significant
reduction
in
global
emissions
this
decade.
Van
Baal
said
the
record
number
of
co-filers
could
be
attributed
to
Shell
seemingly
backtracking
on
some
of
their
climate
commitments
last
year.
At
its
New
York
capital
markets
day
in
June,
the
company
announced
that
it
had
dropped
its
plan
to
reduce
oil
production
by
between
1%
to
2%
each
year
until
2030.
The
company
declared
victory,
stating
the
target
was
reached
eight
years
early
after
it
sold
off
oil
fields
to
others,
which
will
extract
that
oil
instead.
While
the
Follow
This
resolution
faces
difficult
odds
to
pass,
it
will
pile
pressure
on
the
board
and
chief
executive
Wael
Sawan.
Van
Baal
said
the
support
for
this
year’s
resolution
is
by
far
the
strongest
they
have
seen
at
any
oil
major’s
AGMs.
It
surpasses
the
17
institutions
which
backed
Follow
This’s
resolution
at
French
oil
giant
TotalEnergies
last
year,
helping
it
to
secure
30%
of
votes,
which
can
be
considered
a
sizeable
shareholder
revolt.
In
terms
of
Shell,
he
said:
“We
expect
votes
to
increase
as
more
investors
follow
their
leading
peers
by
voting
for
change
at
Shell,
which
is
the
bare
minimum
they
can
do.”
“Large
shareholders
hold
the
key
to
tackling
the
climate
crisis
with
their
votes
at
shareholders’
meetings.
“Shell
will
only
change
if
more
shareholders
vote
for
change.
“The
resolution
is
designed
to
give
Shell
a
shareholder
mandate
to
drive
the
energy
transition.”
Fossil
Fuel
Era
Comes
to
an
End?
At
the
firm’s
AGM
last
year,
the
Follow
This
resolution
sparked
a
shareholder
rebellion
when
it
secure
a
fifth
of
the
votes,
against
the
board’s
recommendation.
The
institutions
who
have
co-filed
this
year’s
resolution
include
Candriam,
Group
AMA,
Edmond
de
Rothschild
Asset
Management,
AP4,
London
CIV,
Mandarine
Gestion,
Ethos
Foundation,
Emmi,
Amundi
and
Greater
Manchester
Pension
Fund.
Matt
Crossman,
stewardship
director
at
Rathbones
Group,
said:
“With
2023
being
the
warmest
year
on
record,
and
COP28
signalling
‘the
beginning
of
the
end
of
the
fossil
fuel
era’
we
are
more
aware
than
ever
that
climate
change
will
create
winners
and
losers.
“Through
our
engagement
with
Shell
and
other
companies
at
the
forefront
of
the
energy
transition,
we
hope
to
create
incentives
for
senior
management
to
align
business
strategies
with
net-zero
scenarios
that
will
help
the
world
thrive.”
Faith
Ward,
chief
responsible
investment
officer
at
Brunel
Pension
Partnership,
said:
“We
are
escalating
our
engagement
by
co-filing
this
resolution
led
by
Follow
This,
as
it
is
essential
that
companies
demonstrate
credibility
in
their
climate
ambitions
in
alignment
with
the
Paris
Agreement.
“We
believe
that
a
reversal
of
progress
on
climate
at
oil
and
gas
majors
is
misaligned
with
our
and
our
beneficiaries’
long-term
interests.”
Advisory
Vote
A
Shell
spokesperson
said
the
company
will
publish
its
first
Energy
Transition
Strategy
update,
on
which
there
will
be
an
advisory
vote
at
the
AGM.
They
said:
“We
remain
committed
to
constructive
engagement
with
our
shareholders,
and
we
believe
our
climate
targets
are
aligned
with
the
more
ambitious
goal
of
the
Paris
Agreement.”
“The
2024
resolution
from
Follow
This
is
broadly
unchanged
from
their
2023
submission,
which
was
rejected
by
shareholders
(as
its
variations
have
been
every
year
since
first
being
submitted
in
2016).
“Shell’s
board
has
previously
advised
shareholders
that
the
Follow
This
resolution
was
unrealistic
and
simplistic,
that
it
would
have
no
impact
on
mitigating
climate
change,
have
negative
consequences
for
our
customers,
and
was
against
the
interests
of
the
company
and
our
shareholders.
“Continued,
targeted
investment
in
oil
and
gas
will
remain
necessary
to
meet
global
energy
demand
over
the
coming
decades
as
the
world
transitions
to
a
lower
carbon
future.”
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