The shareholders of Royal Dutch Shell, the Netherlands-headquartered oil and gas giant, overwhelmingly backed the company’s energy transition strategy pointing to growing pressure to tackle climate change.
A non-binding resolution submitted by Shell with the support of a large group of investors to vote on its recently unveiled climate strategy won 88.74 percent shareholder support at its annual general meeting (AGM) which was held online.
The plan, announced in February, aims to reduce planet-warming carbon emissions to net zero by 2050 by slowly reducing oil and gas output, growing its renewables and low-carbon business and offsetting emissions through carbon capturing technologies and measures such as forestation.
Shell CEO Ben Van Beurden said at the AGM that the strategy, which will be updated every three years, was “comprehensive, rigorous and ambitious.” The company plans to grow its investment in low-carbon in the coming years, but at least 75 percent of its spending will continue to go towards oil and gas.
Increasing support
Meanwhile, a second resolution filed by activist group ‘Follow This’ urging the Anglo-Dutch company to set “inspirational” targets to battle greenhouse gas emissions, was rejected by 69.53 percent of the votes, according to a tally of most votes.
Still, the nearly one-third of votes supporting the resolution, which Shell’s board urged shareholders to reject, is a sharp increase from last year’s vote where a similar resolution won 14.4 percent support.
Absolute reduction targets
Several investors, proxy advisories and activist groups including Follow This have criticized Shell for setting intensity-based carbon reduction targets, which allow Shell in theory to grow its emissions, rather than absolute reduction targets.
However, Shell CEO Ben van Beurden said that setting absolute reduction targets would mean Shell will have to unwind its oil and gas business, which would be replaced by other producers.
Follow This director Mark van Baal said the vote “tells the board that investors don’t accept long-term targets without short and medium-term targets. You need to decrease emissions dramatically and shift investments dramatically in the next decade.”
Recently, BP (British Petroleum) investors rejected a Follow This resolution demanding tougher emission reduction targets, which nevertheless was supported by 20.6 percent of votes, pointing to growing investor pressure.
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