Investors Push for Stricter Climate Goals at Shell
Sabiha Rajpoot
A coalition of 27 investors, holding
approximately 5% of Shell's shares, has jointly filed an independent
resolution, marking the most substantial effort to date to encourage the energy
giant to adopt more ambitious climate targets. Spearheaded by the activist
shareholder organization Follow This, this resolution is set to be presented at
Shell's upcoming annual general meeting. The move to intensify pressure on
Shell's climate strategy coincides with CEO Wael Sawan's pursuit of enhancing
the company's profits, involving a slowdown in renewable investments and an
increase in fossil fuel production.
Major Institutional Investors
Join the Cause
Among the 27 investors collectively managing
around $4 trillion are notable names such as Amundi, Scottish Widows, Rathbones
Group, and Edmond de Rothschild Asset Management, as revealed in a statement by
Follow This. The resolution echoes previous calls by the organization, urging
Shell to align its medium-term carbon emissions reduction targets with the
Paris Climate Agreement, including Scope 3 emissions, which encompass
consumer-related fuel combustion. Currently, Shell aims to halve emissions from
its operations by 2030 while also reducing the overall emissions intensity,
including Scope 3 emissions.
Shell Faces Growing Shareholder
Pressure
Last year, a comparable resolution by Follow
This secured the support of 20% of shareholders in a tumultuous AGM, marked by
attempted protests. Diandra Soobiah, head of responsible investment at British
pension scheme NEST, emphasizes the need for Shell to establish a credible
Scope 3 absolute emissions target, highlighting its potential to demonstrate
leadership, signify a serious commitment to transitioning its business, and
contribute to tangible global change. In response, Shell maintains that its climate
targets align with the 2015 Paris Agreement, emphasizing its commitment to
limiting global warming. CEO Wael Sawan, in office since January 2023,
announced a shift in Shell's approach toward achieving its goal of becoming a
net-zero carbon-emitting company by 2050. The company is set to unveil its
first energy transition strategy update in early 2024, subject to an advisory
vote at the AGM.
