PRESS RELEASE
Shell calls Paris-consistent targets for 2030 “unrealistic”
9 of the 10 largest Dutch investors announced they will vote in favour of climate resolutions that supports Paris-alignment: Shell rejects climate resolution amidst increasing investor pressure
Shell’s directors advise shareholders to vote against the Follow This climate resolution with a new argument: after “unwise” (2016), “unreasonable” (2017), and “unnecessary” (2018, 2020, and 2021), Shell now calls Paris-consistent intermediate targets “unrealistic” in the Notice of Meeting, page 7 published today (full-text climate resolution on page 6 or here).
“We expect that investors’ support for our climate resolution will continue to gain momentum,” responds Mark van Baal of Follow This, “because investors realise that Shell will not align with Paris on its own accord.”
In 2021, the votes more than doubled to 30% (up from 14% in 2020), despite Shell’s claim to be Paris-aligned. Meanwhile, an increasing number of investors insist on science-based emissions reductions targets, meaning deep cuts in absolute emissions by 2030. Recently, 9 of the 10 largest Dutch investors announced they will vote in favour of all climate resolutions(statements below).
“Follow this still believes it is realistic for Shell to lead and thrive in the energy transition, but investors are losing their patience.”
“If Shell were to postpone Paris-alignment much longer, achieving the Paris goal will indeed become unrealistic. We trust investors will not allow oil majors to drag their feet any longer and therefore vote in favour of climate resolutions.”
In April and May, 10 climate resolutions requesting Paris-consistent emissions reduction targets will come to vote at the AGMs of 10 oil majors.
CA100+: no oil major has Paris-aligned intermediate targets
In contrast to Shell’s notice of meeting, which states the company has “set ambitious targets in line with the 1.5°C goal of the Paris Agreement”, the latest benchmark of CA100+, the world’s largest investor alliance of 700 investors ($68 trillion in assets), is crystal clear: despite net-zero by 2050 targets, no single oil major has Paris-aligned emissions reduction targets for 2030 or Paris-aligned capital allocation plans.
Oil major claims Paris-alignment while rejecting other resolutions asking for just that
“If Shell truly believed it is Paris-aligned, it could simply ask the shareholders to vote in favour of the Follow This climate resolution that requests no more and no less than Paris-aligned targets for all emissions.”
Oil and gas companies can make or break the Paris Climate Agreement
“The world needs Big Oil to lead the energy transition from fossil fuels to renewables. While Shell repeatedly claims its ambition is to support Paris, management consistently refuses to adopt the concrete emissions targets needed to reach the Paris goal of 1.5°C.”
“We expect that the first oil major to rapidly scale the energy transition to renewables will be rewarded by shareholders and customers, leading other oil majors to follow suit.”
“We are sorry the board of Shell doesn’t see the imperative of shareholder support to drive the energy transition which the world urgently needs, and advises against our supportive resolution.”
Investors’ support for climate targets resolution still necessary
“A vote for the Follow This climate resolution will send a strong signal to Shell and other oil majors that institutional investors mean business about stopping climate change. Management requires unambiguous support from shareholders to align its targets with the Paris Agreement and to invest accordingly.”
“A vote against the climate targets resolutions will in effect legitimize the inadequate targets of Shell and other oil majors, and deny management the support to radically shift capital investment from fossil fuels to renewables. According to the CA100+ benchmark, Shell’s current capital spending on oil and gas is incompatible with the goal of the Paris Climate Agreement.”
9 out of 10 Dutch investors to vote in favour of climate resolutions
In a statement published in April, eight Dutch investors “call on our fellow investors to […] vote in favour of shareholder resolutions that encourage progress towards the Paris Agreement 1.5°C warming scenario” (Blue Sky Group joined later). In a statement on April 19, ABP announced to “in principle, vote in favour of shareholders’ climate resolutions.” (translation of core below).
Shell avoids shareholder mandate for absolute emission reductions
“Shell’s target to reduce the net carbon intensity of its products [Scope 3] by 20% by 2030 will not deliver absolute emission reductions to achieve the Paris goals. Moreover, Shell doesn’t plan to shift investments substantially away from fossil fuels to renewables and plans to increase natural gas production.” According to Global Climate Insights, an Australian research institute, Shell’s emissions will increase by 4% by 2030. Shell has not refuted this conclusion.”
“Investors want to see absolute emission reductions instead of reductions in carbon intensity alone.”
“With today’s negative voting advice, Shell’s Board is still failing in its responsibility to show leadership at a time of devastating climate change.”
BACKGROUND
Shareholder rebellion
In May 2022, the Follow This climate resolutions will again come to a vote at the shareholders’ meeting of Shell, as well as nine other oil majors.
In 2021, investors’ votes in favor of these resolutions showed a shareholder rebellion at Big Oil; in Europe, votes doubled, despite oil majors’ claims to be Paris-aligned; in the US, Follow This won three consecutive majorities. The companies responded with emissions reduction targets that fall short of Paris-alignment.
The 2022 resolutions repeat the substance of previous Follow This resolutions which have been filed since 2017.
