Majority of investors miss an opportunity to urge Shell to drive down emissions by 2030PRESS RELEASEInvestors miss the opportunity to urge Shell to drive down emissions by 2030 as votes for the Follow This climate resolution fall stagnant at 20% (20% voted in favour in 2022), Shell announced at its AGM today.“We have made it easy for investors to use the power of their votes, but many investors have yet to decouple short-term profits from long-term risks for the company and their portfolios,” responds Mark van Baal, the founder of Follow This.“Thankfully, prominent investors have voted in favour of our climate resolution; we thank them for their determination to achieve Paris. We hope that other investors will follow their leadership and view Total’s, Exxon’s, and Chevron’s AGMs later this month as retakes to correct their oversight.”“Considering that up to 99% of shareholders voted along with the board on the other 25 resolutions, 20% of support and a significant number of abstentions in spite of a negative board recommendation clearly indicates shareholder discontent.”“Investors still have the chance to vote for medium-term scope 3 targets in line with Paris at TotalEnergies (26th May), ExxonMobil and Chevron (31st May).” The votes stagnatedThe votes decreased despite new and significant upfront investor support: the resolution was co-filed by institutional investors*, endorsed by the Climate Action 100+ lead investors for the first time, and focused on Paris-alignment of Scope 3 emissions by 2030. Furthermore, prominent asset owners in the UK, such as LAPFF and the Church of England, urged other investors to vote.UK corporate governance code requires actionThe UK corporate governance code requires companies to report on “actions taken” within six months after 20% or more vote against management at an AGM. “Shell must improve its targets to respond to this group of shareholders who demand Paris-aligned emissions reductions this decade instead of in 2050.”Shell hinted at reversing climate plans“The shareholder rebellion urging Shell to improve its 2030 climate target will make it more difficult for the company to backtrack on its already inadequate climate plans in June, which Shell has hinted at in recent months. “Now is not the time roll back ambitions, but for Shell to invest its profits in the transition” According to the International Energy Agency (IEA), “[recent] windfall gains provide a once-in-a-generation opportunity […] for major oil and gas companies to do more to diversify their spending.” “Many investors recognize that Big Oil’s current cash position presents a historic opportunity for these companies to lead the transition.” CA100+ lead investors left out in the coldMN and PGGM, CA100+ lead investors at Shell, pre-declared their intention to vote in favour of resolution 26, but the results clearly show that several signatories did not heed their call. Last week, MN and PGGM expressed their discontent with counterproductive actions by some of the CA100+ members in Environmental Finance. “It’s sometimes very frustrating when we speak to a company and we’re trying to uphold the objectives of the CA100+ but some other members are speaking on the sidelines with [the same] company saying something very different,” said Xander Urbach of MN. “The CA100+ and its signatories missed an opportunity to make impact today. The results show that the initiative needs to do a lot more to align the efforts of its members,” says Mark van Baal of Follow This.Say on ClimateShell’s Energy Transition Progress resolution (no. 25), a.k.a. the company’s Say on Climate, received 80% of shareholder votes. “Shell’s in-house climate resolution continues to confuse shareholders. The only resolution allowing shareholders to explicitly request alignment with Paris is the Follow This climate resolution.”Clarity“Investors that voted in favour of climate resolution 26 recognize this vote as the most effective tool to urge Shell to drive down emissions by 2030.”“When the votes are published, it will be clear which investors urge Shell to improve its climate targets and which investors allow Shell to postpone emission reductions.”“Clients of institutional investors, such as pension funds, will be watching how their asset managers performed on these votes to gauge their competence as long-term value stewards.”Faith Ward, Chair of the UK Asset Owner Roundtable, announced the UK’s major fund managers will meet following the proxy season to discuss ‘their asset managers’ performance on the votes at European Oil and Gas companies. “We thank supporting investors for their determination to achieve the Paris goal. We expect that they will take the same leadership positions at the AGMs of Total, Exxon, and Chevron later this month and we hope that their peers will follow their lead.” “We hope that the investors that voted against, will view Total’s, Exxon’s and Chevron’s AGMs as retakes to correct this oversight.”* Co-filing investors: Edmond de Rothschild Asset Management (EDRAM, France, managing € 75 billion) and Degroof Petercam Asset Management (DPAM, Belgium, € 51 billion)
Read Follow This’ statement and question at Shell AGM
With best regards on behalf of the Follow This team,
Mark van Baal +31 6 22 42 45 42 (English) [email protected]Jesper Vaarwerk +31 6 83 13 97 36 (Dutch) [email protected]McKenzie Ursch +31 6 40 16 26 72 [email protected]Attachments: climate resolutions Shell, BP, Chevron, and ExxonMobil, and TotalEnergies.Press images
