A shareholder resolution calling for oil and gas major Royal Dutch Shell to set targets aligned with the goals of the Paris Agreement on climate change got 14.4% of the vote at the company’s AGM yesterday, more than double the support it received in 2018, the last time it was on the agenda.
Filed by shareholder campaign group Follow This, the climate targets resolution got 5.5% of the vote in 2018.
The company argued against the 2020 resolution for reasons beginning with that it was “unnecessary and potentially counterproductive to Shell’s efforts to support society in meeting the goals of the Paris Agreement”.
The vote on it at yesterday’s AGM – at which attendance in person was not allowed – followed Shell last month announcing a commitment to realising net zero emissions by 2050, agreed with investors acting as part of Climate Action 100+, led by the Church of England Pensions Board (CEPB) and Robeco.
Part of Shell’s new ambition involves a plan to cut its emissions intensity by 65% by 2050.
Follow This has argued that although Shell was taking another step in the direction of action aligned with delivering on the Paris goals, its new ambition “falls short” of being Paris-aligned.
Mark van Baal, founder of Follow This, said investors supporting its resolution had shown “vision and tenacity”.
“Binding targets are imperative,” he said.
Follow This’s resolutions ask oil and gas majors to set Paris-aligned targets for greenhouse gas emissions stemming from the company’s operations as well as from use of its energy products, so-called Scopes 1-3, for the short-, medium- and long-term.
Progress but ‘overstated claims’
According to recent research from the Transition Pathway Initiative, BP and OMV are the only European integrated oil and gas companies not aligned with the emissions reductions pledged by signatories to the Paris Agreement, with Shell and Eni having the most ambitious emissions-reduction plans.
However, claims of alignment with ‘net-zero’, 1.5°C or even 2°C pathways were overstated, according to the analysis.
With regard to Shell, TPI said its analysis found that Shell’s goal to cut its emissions intensity by 65% by 2050 was the most ambitious in the sector and the closest to alignment with a 2°C scenario.
Writing in TPI’s report, Adam Matthews, co-chair of the TPI and director of ethics and engagement at CEPB, and Rory Sullivan, chief technical advisor to the TPI and CEO of Chronos Sustainability, said their view was that investors should welcome the progress made by the European integrated oil and gas sector in the last six months.
“However, more is needed and investor engagement, through initiatives such as CA100+, will need to evolve to ensure this momentum is sustained. As shown by this TPI paper, a critical mass of European companies have evolved their position and as a result this presents an opportunity for investors to now establish a net zero standard for the oil and gas sector.”
BP, OMV, Repsol, Shell and Total have all indicated they intended to further update investors on their climate ambitions during 2020.
According to Matthews and Sullivan, companies should look to take action such as setting both intensity and absolute emission reduction targets, provide standardised and comparable disclosures, set Scope 3 emission targets, and establish a “sectoral decarbonisation plan”.
