Asset owners are divided on how to address the climate transition and governance plans of oil and gas majors this annual general meeting (AGM) season, as they prepare to vote at Shell’s AGM tomorrow.

On Friday, Aegon publicly announced it wanted its asset managers to vote against Shell’s energy transition plan, citing the “lack of a credible plan for reducing absolute Scope 3 emissions across the organisation”.

Scope 3 emissions are those generated by a company’s value chain, which is where the lion’s share of oil and gas companies’ pollution comes from.

“We have material questions about the board’s ability to ensure its business model is sustainable over the longer term,” Aegon said in a statement, criticising Shell’s recent decision to introduce a pay policy that incentivises the sale of liquefied natural gas instead of greener technologies like renewable energy.

Norges Bank Investment Management (NBIM), on the other hand, has revealed it will support Shell’s energy transition strategy.

In a pre-declaration of its voting intentions, published on Friday, the $1.5trn sovereign wealth fund acknowledged that the strategy had “evolved under the new CEO” –  a reference to the firm’s decision in March to reduce its carbon-intensity and renewable energy targets.

“We nevertheless believe that it sufficiently retains the core components of a Paris-aligned transition plan and those outlined by Norges Bank Investment Management’s expectations on climate change,” it explained.

“Our expectations ask for interim and net zero targets. We have encouraged Shell to make additional strategy disclosures that could reduce uncertainty about the company’s direction in the mid-2030s.”

As well as supporting the re-election of all of Shell’s directors, NBIM, which is estimated to own around 3% of the oil major, added that it would vote against a shareholder proposal asking for the alignment of its 2030 Scope 3-reduction targets with the goals of the Paris Agreement. That resolution was co-filed by a consortium of investors including AP3, AP4, Amundi, Scottish Widows, Brunel Pension Partnership, the Greater Manchester Pension Fund and London CIV.


French oil major TotalEnergies will also hold its AGM this week, having recently found itself caught up in a feud with investors and proxy advisors.   

Earlier this month, Glass Lewis advised investors to vote against the re-election of TotalEnergies’ chief executive officer and chair, Patrick Pouyanne, because he held “ultimate accountability” for the decision to block a shareholder proposal that would have requested a separation of his two roles.

The proposal was filed by 19 institutional investors, including AP7, Lothian Pension Fund and ERAFP, who between them owned around 1% of TotalEnergies’ share capital.

TotalEnergies said in a statement that its board had “unanimously decided” to reject the request, which it argued it was permitted to do under French company law because it would undermine the board’s ability to decide its own strategy.

It is understood that the company is nervous about the outcome of non-binding shareholder votes after a “consultative” proposal filed last year, asking it to align its Scope 3 emissions with the goals of the Paris Agreement, garnered a significant 30% support.

TotalEnergies was quick to clarify that its original statement had been misunderstood by Glass Lewis, and that Pouyanne was not involved in the decision to block this year’s shareholder proposal. This prompted the proxy advisor to issue a revised recommendation to vote against TotalEnergies’ lead independent director, Jacques Aschenbroich, instead.

TotalEnergies said last week that the push to vote against directors is part of a “campaign driven by activist investors”.

Hitting the courts

The Ethos Foundation responded to TotalEnergies’ decision to block its proposal by mounting a legal challenge in French commercial court.

In the US, Exxon hit the headlines earlier this year when it decided to take Dutch campaign group Follow This to court over its attempt to file a shareholder proposal calling for better alignment with the goals of the Paris Agreement.

NBIM’s CEO, Nicolai Tangen, described the move at the time as “a worrisome development”, telling the Financial Times he was “concerned about the implications for shareholders rights”.

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