Follow This’ Shareholder Resolution
At Shell Plc’s annual general meeting on May 24, 2022, we are calling on investors to vote in favour of the Follow This shareholder resolution. The resolution calls on the company to publish short-, medium- and long-term greenhouse gas emission targets that cover the company’s operations and the use of its energy products and that are consistent with the goal of the Paris Agreement.
Follow This has filed resolutions at Shell every year since 2016. The resolutions have attracted a steadily rising percentage of investor support — reaching 30% at the 2021 AGM.
The UK’s corporate governance regulations require companies to report on actions taken after any resolution that attracts the votes of 20% or more shareholders. Shell’s statement, issued on 18th November 2021, says that the company “responded by announcing a new target to halve Scope 1 and 2 absolute emissions under Shell’s operational control by 2030, compared to 2016 levels on a net basis”.
Follow This responded that Shell’s “silence about Scope 3 speaks volumes about oil majors’ reluctance to engage with the fundamental concerns raised by shareholders.” And that Shell promises “to decrease average emissions (carbon intensity) while increasing total emissions (absolute emissions)”.
In fact an in-depth assessment of Shell’s strategy by Global Climate Insights concluded Shell will increase its net CO2-emissions by 4% by 2030 (compared to 2019).
A letter sent to Shell investors by Follow This and 5 other organisations ahead of Shell’s 2021 AGM about the companies’ energy transition strategy pointed out significant issues with the company’s greenhouse gas emission targets, decarbonisation strategy, proposed volume of offsets and carbon credits, and capital expenditure plans.
Shell’s strategy has not been significantly updated since then. Indeed, Follow This pointed out in February that “You can’t claim to be in transition if only 12% of your investments are going to new, renewable energy businesses and investments in old, fossil businesses are increasing”. Planned investments in 2022 in ‘renewables and energy solutions’ are $3 billion. Investments in oil and gas exploration and production (upstream) will go up from $6 billion in 2021 to $8 billion in 2022.
Shell has also long been criticised by community organisations in the countries where it operates. Notably in Nigeria. Before last year’s Shell AGM 41 Nigerian civil society organisations joined together to write a letter to one leading investor in Shell stating that ““It is not acceptable for the Church [of England Pensions Board] to sign off on a Shell plan for this decade that makes no absolute carbon emission reduction pledges, includes huge increases in gas production, and relies on improbably large amounts of tree-planting. Endorsing Shell’s plan is akin to handing the corporation a right to toy with planetary systems while the poor and vulnerable continue to fight a losing battle against global warming.”
We recommend that investors back the Follow This resolution at Shell, to send a signal that emissions from the oil and gas sector must reduce significantly this decade.
Follow This has also filed resolutions at a further 7 oil majors in 2022.