Shell has urged its investors to cast votes against a climate resolution co-filed by institutional investors and led by Follow This.

It said that the proposal works “against both good governance and also has negative consequences for our customers”.

Shell said that, if approved, the resolution would have a “material negative financial impact on the company and its ambition to be the investment case through the energy transition”.

However, shareholder group Follow This – which is leading the resolution – said the advice from Shell confirms the company’s resolve to continue selling fossil fuels “for as long as possible”.

Mark van Baal, founder of Follow This, said: “Shell’s rejection of this fair ask by 27 of its largest investors demonstrates the company’s intention to stay on collision course with the Paris Climate Agreement.”

He added that the ball is on the court of other responsible investors. “We expect that they will side with their peers instead of the board of Shell,” he continued.

Climate resolution

The resolution was co-filed back in January by 27 institutional investors with €4trn of assets urging Shell to adopt Paris-aligned targets.


Follow This calls on responsible investors to ‘side with their peers’ instead of the board of Shell.

The shareholders behind the resolution include: AP3, AP4, Brunel Pension Partnership, Emmi-Vorsorgestiftung, Greater Manchester Pension Fund, London CIV, NEST, Pension Protection Fund and Ethos, representing five other Swiss investors.

The resolution supports the company to set medium-term emission reduction targets in line with the Paris Climate Agreement and will be brought to a vote at Shell’s annual general meeting (AGM) in May.

Shell’s voting advice

In its note ahead of its AGM nxt month, Shell said the climate resolution is “more harmful than helpful”.

Follow This rejected this statement, pointing out that not reducing emissions this decade is “against shareholders’ interests in view of the future of the company as well as the global economy”.

Follow This also pointed out that Shell contradicts itself by saying it “believes” to be Paris-aligned and that a resolution supporting exactly that is “against shareholders’ interest”.

“Shell is not Paris-aligned as it will not further reduce overall emissions this decade as it confirmed in their appeal to a Dutch court last week,” Follow This stated.

It also pointed out that no third-party source has confirmed that Shell’s medium-term targets are aligned with a 1.5°C warming scenario.

“If Shell were Paris-aligned, they could advise their shareholders to vote in favour of this resolution, instead of hiding behind the word ‘believe’,” added van Baal.

Shell also stated in its note that emission reductions would mean “handing over retail and commercial customers to competitors”, which Follow This said it showed a “lack imagination” from the board of Shell to see that the company has the capital and market-making capabilities to replace fossil fuels with clean energy.

Shell’s climate targets

Last year 20% of shareholders voted in favour of the climate resolution, and on 14 March Shell backtracked on its 2030 climate target, lowering its emissions reduction target from 20% to 15-20% by 2030, and scrapped its emissions reduction target of 45% by 2035 and scrapped its 2035 target.

Van Baal said: “This demonstrates that one-fifth of shareholders is not enough to drive change. Votes must increase.”

“With this backtrack, Shell bets on the failure of the Paris Climate Agreement which requires almost halving emissions this decade,” he noted, adding: “Only Shell’s shareholders can change the board’s mind by voting for our climate resolution at the shareholders’ meeting in May.”

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