Shell Advises Shareholders To Reject Binding Climate Resolution

Royal Dutch Shell has recommended that its shareholders vote against a climate resolution that an activist climate group wants passed at the annual general meeting next month.

Dutch climate group Follow This has filed for a third consecutive year a proposal for a binding resolution to be voted at Shell’s AGM.

“Shareholders support Shell to take leadership in the energy transition to a net-zero-emission energy system. Therefore, shareholders request Shell to set and publish targets that are aligned with the goal of the Paris Climate Agreement to limit global warming to well below 2°C,” the draft resolution says.

In a phone call with reporters on Monday, Shell’s chief executive Ben van Beurden said that “We share the objective of Follow This for Shell to show leadership in the energy transition but at the same time we consider the resolution unnecessary given that we have already outlined an approach that is much wider-ranging and much more progressive.”

Van Beurden has recently said that Shell will aim to bring down the net carbon footprint of its energy products by around half by 2050.

“I don’t think a 50 percent reduction of CO2 emissions footprint in 2050 meets the Paris climate agreement,” Follow This founder Mark van Baal told Reuters. “Shell uses these ambitions to do business as usual in the next decades,” van Baal noted.

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Shell’s van Beurden said on Monday that the company’s current plan for energy transition is more progressive and flexible than the target-binding draft resolution of Follow This, because binding Shell to specific numbers could make it more difficult to shift strategies if government policies or other changes in the future affect the profitability of technologies.

Last week, Shell outlined its strategy for the coming ‘energy transition’ decades, saying that it will still sell the oil and gas the society needs, while adapting its portfolio to lower-carbon energy, “when this makes commercial sense.”

At the call with reporters, van Beurden also had a message to the mainstream investors who are worried that Shell’s investment case would become less and less compelling as the world shifts away from oil. Shell will not shrink in the future, and it is more than a pure exploration and production company, van Beurden said.

By Tsvetana Paraskova for Oilprice.com

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