Shell PLC SHEL-N on Wednesday urged shareholders to vote against an independent resolution, co-filed by a group of 27 investors, that called on the energy company to set tighter climate targets.
The resolution, the biggest such drive to date in terms of the size of the participants, is led by activist shareholder Follow This and will be voted on at Shell’s annual general meeting on May 21.
In a notice ahead of the AGM, Shell recommended voting against the resolution, saying it “is against both good governance and shareholders’ interests, and also has negative consequences for our customers.”
The resolution, filed by a group of investors with around US$4-trillion under management, urges Shell to align its medium-term carbon-reduction targets with the Paris climate agreement, including emissions from fuels burned by Shell’s consumers.
Shell last month weakened a 2030 carbon-reduction target and scrapped a 2035 carbon intensity reduction objective, citing expectations for strong gas demand and uncertainty in the energy transition. The company however reaffirmed a plan to cut emissions to net zero by 2050.
Shell’s retreat followed a similar move by rival BP PLC last year as many governments around the world slowed down the rollout of climate policies and delayed targets in response to soaring energy costs and supply concerns.
Shell said the resolution, if approved, “would have a material negative financial impact on the company and its ambition to be the investment case through the energy transition.”
On balance, Shell added, the resolution would have “a negative impact on the climate.”
Follow This founder Mark van Baal said that “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.”
Shell’s shares have risen by almost 11 per cent this year while shares of European rivals BP and TotalEnergies SE gained 11 per cent and 10 per cent, respectively.
Shell’s own resolution on its energy transition strategy will be voted on at the AGM.