A coalition of 27 investors, collectively holding approximately 5% of Shell’s shares and managing around USD4tr, has jointly filed an independent resolution led by activist shareholder Follow This, as reported by Reuters on January 15. This resolution urges Shell [SHEL:LN], a major energy company, to establish more stringent climate targets and align its medium-term carbon emissions reduction goals with the Paris Climate Agreement, encompassing Scope 3 emissions, which include emissions from fuels consumed by end-users. The resolution is scheduled for a vote at Shell’s upcoming annual general meeting. Despite Shell’s current aim to halve emissions from its operations by 2030 and reduce overall emissions intensity, including Scope 3, the investors are pushing for more ambitious targets. Notably, a similar resolution by Follow This last year garnered 20% support from shareholders.

The effort to increase pressure on Shell’s climate strategy coincides with CEO Wael Sawan’s focus on boosting company profits by slowing investments in renewables and expanding fossil fuel production. Shell defends its climate targets, asserting alignment with the Paris Agreement. The company contends that the Follow This resolution is unrealistic, simplistic, and would have negative consequences, arguing that its current approach is in the best interests of shareholders. Sawan, who assumed leadership in January 2023, acknowledges a shift in Shell’s pathway towards achieving its net-zero carbon emission goal by 2050 and plans to present an energy transition strategy update for an advisory vote at the upcoming AGM in 2024.

Sources:

https://www.reuters.com/sustainability/group-27-shell-investors-co-file-new-climate-resolution-2024-01-15/