For the first time, the Climate Action 100+ lead investors* at Shell are endorsing the Follow This climate resolution, demonstrates an investor briefing released today.
Lead investors* MN and PGGM encourage peers to vote in favour of the Follow This climate resolution at Shell by pre-declaring their votes and flagging# the climate resolution in the CA100+ alliance, the world’s largest investors’ coalition against the climate crisis (700 investors with $68 trillion assets under management).
This step is a break with the past when the CA100+ lead investors at Shell (Church of England and Robeco) campaigned against the Follow This climate resolutions.
It also contrasts with the voting behaviour of BP’s CA100+ lead investors (LGIM, Fulcrum, and EOS at Federated Hermes) who voted against the same climate resolution at BP last month, undermining their engagement with the company.
* Lead investors lead the engagement of the Climate Action 100+ with Shell
Response Follow This:
“If CA100+ members want to leverage the engagement position of their leads at Shell, they will need to vote in favour of Paris-aligned targets,” says Mark van Baal, founder of Follow This, “a vote against would undermine their leads’ engagement.”
“The voting results will also be a litmus test for the credibility of the CA100+.”
“We thank MN and PGGM for their determination to achieve the Paris goals, as well as their recognition that engagement and voting are not mutually exclusive (as oil companies frequently claim), but rather strengthen each other.”
Why is PGGM voting this way: “We believe that the adoption and implementation of this resolution will reduce the risk of stranded assets and/or increase the opportunities afforded by the energy transition.
The resolution does not prescribe that the company must implement absolute emissions targets, only that its existing mid-term target should align with Paris. This allows Shell to either cut hydrocarbon production further or increase its low carbon targets. This flexibility leaves room for the company to implement the resolution without compromising its profitability.
While we acknowledge that scope 3 targets are dependent on the demand for fossil fuels, this should not inhibit increased ambition. PGGM is also voting in favour of similar resolutions at the AGMs of companies on the demand-side of energy so that efforts by oil and gas companies will be mirrored by their customers.”
PGGM’s pre-declaration: “Although Shell is a front-runner among oil and gas companies, there is insufficient evidence that the company’s current strategy is aligned with a 1.5°C warming pathway, which requires a significant decrease in oil and gas production and increase in the supply of low carbon solutions. No independent, third-party source shows that Shell is Paris aligned in 2030.”
# CA100+ flags proposals “aligned with the goals of the initiative” and acknowledges them as “a powerful signal and a useful engagement tool”.
Climate Action 100+ is an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change; 700 investors, responsible for over $68 trillion in assets under management, are engaging companies on improving climate change governance, cutting emissions and strengthening climate-related financial disclosures.
The Shell AGM will be held in London on May 23. The climate resolution supports Shell to align its 2030 Scope 3 emissions reduction target with the Paris Climate Agreement.
Please find the investor briefing here.
A previous version of the press release stated: ‘World’s largest investor alliance CA100+ supports Follow This climate resolution at Shell’. This has been changed to: “Climate Action 100+ flags Follow This climate resolution at Shell.”
Signatories are independent fiduciaries responsible for their own investment and voting decisions and must always act completely independently to set their own strategies, policies and practices based on their own best interests. Full CA100+ disclaimer here.’