An investor-sponsored resolution for Shell to set more ambitious climate goals was rejected by the company’s shareholders on Tuesday. The denial came after Shell CEO Wael Sawan announced in March that the company’s 2030 carbon reduction goals will be relaxed, citing robust gas demand and uncertainty surrounding the energy transition while prioritizing profitable oil and gas operations.
The investor resolution garnered support from 18.6% of shareholders in the preliminary results. In contrast, a separate resolution introduced by Shell’s board regarding its climate strategy received the backing of 78.2% of shareholders.
“Continued investment in oil and gas will be necessary,” stated Shell Chairman Andrew Mackenzie during the company’s annual general meeting. He emphasized that Shell sees liquefied natural gas (LNG) as a critical fuel during the energy transition and that oil will remain vital for the foreseeable future.
The meeting faced multiple disruptions from climate protesters chanting “Shell kills,” with demonstrations also taking place outside the venue.
The resolution, filed by activist shareholder group Follow This and supported by 27 investors managing approximately $4 trillion in assets, called for Shell to align its medium-term carbon emissions reduction targets with the Paris Climate Agreement. This included addressing Scope 3 emissions, which result from the end-use of Shell’s products and account for about 95% of the company’s greenhouse gas output.
Prominent backers of the resolution included Amundi, Scottish Widows, Rathbones Group, and Edmond de Rothschild Asset Management. However, Shell’s board had recommended against the resolution, arguing that it was “against both good governance and shareholders’ interests, and also has negative consequences for our customers.”
Last year, a similar climate resolution filed by Follow This received 20.2% support, with the AGM similarly disrupted by protesters attempting to storm the stage.
The vote comes as oil majors face increased pressure from investors to focus on their most profitable ventures following years of substantial profits, even as returns from renewable energy projects have declined.
Scientists warn that to meet the 2015 Paris Agreement’s goal of keeping global warming well below 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels, the world must cut greenhouse gas emissions by approximately 43% from 2019 levels by 2030.
