Dutch investors set out expectations for oil and gas sector
All oil and gas companies should demonstrate credible strategies to achieve greenhouse gas emissions targets in line with keeping global warming to well below 2°C above pre-industrial levels, a group of six major Dutch investors has said.
The group – comprising Achmea, Actiam, Aegon, Kempen Capital Management, MN, and NN Investment Partners – set out its expectations for the entire oil and gas sector in the wake of campaign group Follow This withdrawing its climate resolution from the agenda for Royal Dutch Shell’s annual general meeting.
The campaign group did so following “intensive” discussions with the six Dutch investors, who considered Shell to be an industry leader for the steps it has taken towards aligning with the Paris Agreement climate change goals.
The Dutch investors said they encouraged Shell to bring its long-term net carbon footprint ambition in line with the lower 2°C pathway from the Intergovernmental Panel on Climate Change (IPCC), the UN body for assessing the science related to climate change.
“We consider the company’s 2020 AGM as a good moment for Shell to demonstrate this,” said the investors.
“This statement saves the entire sector years in discussions about which scopes, scenarios, metrics and methodologies are reasonable”
Mark van Baal, Follow This
The investors also said they expected all oil and gas companies to report on their targets and progress in line with the recommendations of the Task Force on Climate-related Financial Disclosures.
Mark van Baal, of Follow This, said: “These six Dutch investors again take the lead in supporting oil companies to truly commit to Paris.
“This statement saves the entire sector years in discussions about which scopes, scenarios, metrics and methodologies are reasonable.”
The statement of expectations can be read here.
NGOs set out expectations for investor coalition
Nine campaign groups* have joined forces to call for Climate Action 100+, a major investor-led engagement initiative, to divulge more information about its activities.
The groups also set out their expectations for how the investors involved should engage with companies, governments, and organisations like themselves, in a letter to the CEOs of the more than 320 investors backing the coalition, and to the organisations co-ordinating the initiative.
Requests included that investors “adopt a consistent, outcomes-focused and transparent escalation process” and support climate resolutions filed by smaller shareholders and civil society organisations.
The campaign groups also recommended that Climate Action 100+ publish a list of company targets and an annual statement detailing progress against them.
The investor coalition had celebrated key achievements in recent months, the campaign groups noted, but “a lack of transparency makes it difficult to judge the impact that Climate Action 100+ is having at other companies”.
In December, Shell announced it would set short-term emission reduction targets and link them to executive pay, a move that followed engagement with investors under the Climate Action 100+ banner.
Climate Action 100+ has also encouraged developments at Glencore and BP.
Catherine Howarth, chief executive of ShareAction, one of the nine campaign groups, said: “Climate Action 100+ is the investor initiative on climate change many were waiting for.
“But success depends on action and real effort by all signatory investors, and so far, not all are stepping up. Tone from the top is critical, which is why we’ve written to the CEOs of signatory investors. It’s right that civil society demands accountability and determined action from Climate Action 100+ investors in every region of the world.”
Stephanie Pfeifer, a member of the Climate Action 100+ global steering committee and CEO of the Institutional Investors Group on Climate Change, one of the five co-ordinating organisations, said: “We welcome today’s letter from civil society organisations. It is encouraging to see recognition and acknowledgement of all that Climate Action 100+ has achieved so far. The initiative and its investors are committed to results and [are] already delivering on its goals.
“We value the input and look forward to dialogue with these organisations, many of whom we already work with closely, on a shared commitment to greater action on climate change.”
Preventable Surprises, one of the nine civil society organisations behind the letter, had already issued a challenge to Climate Action 100+ investors upon its launch in 2017.
*Australasian Centre for Corporate Responsibility, ClientEarth, Follow This, Greenpeace International, Just Share, Preventable Surprises, Rainforest Action Network, Sierra Club, ShareAction