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In March this year, Shell said that it is proposing a Directors’ Remuneration Policy, subject to shareholder approval at the 2017 Annual General Meeting (AGM) on May 23, 2017. The policy, if approved by shareholders, will be effective until the 2020 AGM, unless shareholders approve other policies in the meantime.
The proposed remuneration policy for executives includes, among other things, new metrics for greenhouse gas (GHG) management, and these now form 10 percent of the annual bonus scorecard, Shell said.
“We have moved to ensure the bonus reflects progress in managing Shell’s GHG emissions,” the company said back then.
But now, a week before the annual general meeting, several investor groups that hold shares in Shell want specific details in advance about how the group will calculate those bonuses, rather than just reporting directors’ remuneration for past periods, Reuters reported on Wednesday, citing representatives of investor groups.
“We would prefer to see public, pre-set greenhouse gas reduction targets using a methodology appropriate to the type of an emission,” Bruce Duguid, director in the stewardship team at Hermes Investment Management, told Reuters.
Shareholders also want Shell to include emissions from all operations, including upstream, in its remuneration policy plan, which has identified three specific business areas: refining, chemical plants, and flaring in upstream assets.
“We would love to see that metric be expanded to cover the trickier issue of upstream emissions, from exploration and production. The more difficult issue of the carbon intensity of its reserves hasn't been addressed,” Matt Crossman of Rathbone Greenbank Investments told Reuters.
A climate-activist group of shareholders, named Follow This, is requesting that Shell set and publish targets for reducing emissions that are aligned with the goal of the Paris Climate Agreement to limit global warming to well below 2°C.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.