While praising Shell’s overall plans to reduce greenhouse gases, a number of major shareholders urged the company to commit to firm targets to cut their GHG emissions from its oil and gas production. Shell photo.
Shell investors looking for company to push climate to the forefront addressed AGM Tuesday
At the Royal Dutch Shell annual general meeting on Tuesday, some top investors in the global energy giant pressured the company to commit to setting hard targets to cut greenhouse gas emissions to take on climate change.
In response, Shell’s Chief Executive Officer Ben van Beurden said the Anglo-Dutch company has set out “ambitions” to cut carbon emissions in half by 2050 and boost production of renewable energy sources.
Van Beurden said his company’s changes were ground breaking for the industry.
The CEO clashed with some shareholders who pressed him to turn promises into action. Van Beurden countered “Nobody else comes close, it is seriously ambitious”.
The motion to propose setting targets was defeated.
There are a growing number of major shareholders who, while pleased with Shell’s overall plans, are looking for the company to commit to firm targets in carbon emissions reductions in its oil and gas production as well as from the fuels it sells.
“We call for this ambition to be translated into firm medium and short term targets, aligned with the Paris Agreement,” Reuters reports a group of 27 investors managing $7.9 trillion in assets said in a statement read at the AGM.
The group of heavy hitter investors includes HSBC, BMO Capital Markets, AXA and UBS.
Also, activist group Follow This called on Shell to set targets to cut emissions and comply with the 2015 Paris Climate Agreement, which aims to limit global warming to well below 2°C.
The board of directors at Shell urged shareholders to vote against the resolution brought by Follow This. The resolution was soundly defeated by a majority of 95 per cent.
According to van Beurden, setting targets will impact Shell’s efforts to adapt to the the energy transition. He also rejected Follow This’ claims that Shell’s plans fall short of the Paris agreement goals.
“The reputation of our company is irrevocably linked to targets,” van Beurden said. “Nobody can see how the energy transition will play out over this period.”
Despite the overwhelming defeat of the Follow This motion, Mark van Baal, founder of the group, says energy companies are under more pressure to set clear goals.
“There is a very clear signal that investors want targets, not ambitions,” he told reporters. He added “the oil industry can make or break the Paris climate agreement.”
Last year, Shell committed to cut GHG emissions by 20 per cent by 2035 and by half by 2050. These targets include the company’s operations and emissions that result from consumption of its products.