Dive Brief:
- Dutch investor MN said it would support a climate resolution put forward by activist shareholder group Follow This, which urges Shell to set more ambitious climate targets in line with the Paris Agreement. The asset manager voiced its support for the proposal Sunday, almost a month before Shell’s Annual General Meeting, which is set to take place May 21.
- The Netherlands-based investor said that though it supports Shell’s ambition to reduce scope 3 emissions from the oil products it sells by 15-20% by 2030, these reductions will be offset by the oil major’s plans to expand production of fossil liquefied natural gas by 20-30% by 2030.
- MN is also a member of Climate Action 100+ — a $68 trillion climate action investor group that advocates for curbing the carbon footprint of the world’s largest corporate greenhouse gas emitters — and leads the coalition’s engagement with Shell, which recently watered down a number of its decarbonization targets.
Dive Insight:
MN said it would vote for the advisory resolution as it supports the asset manager’s goal to align its portfolio with the Paris Agreement, noting that Shell’s fossil LNG growth strategy does not align with pathways laid out in the international climate accord.
“With this pre-declaration, MN is basically urging all CA100+ members to vote for as well in order to give their lead engager greater leverage at Shell,” Follow This founder Mark van Baal said in an emailed statement to ESG Dive. “[This] creates a litmus test for the credibility of the CA100+: the number of members who will cast their votes with their lead investor rather than the board of Shell.”
The Dutch asset manager will also vote against a resolution which asks shareholders to approve Shell’s updated energy transition update, on behalf of Dutch pension fund Pensioenfonds Metaal & Techniek, according to a statement from Follow This.
Last month, Shell announced it was scaling back a carbon emissions reduction target for 2030 and scrapping a goal to further reduce its carbon footprint by 2035. The updated strategy aims to reduce the net carbon intensity of Shell’s energy products by 15-20% by 2030, compared to a 2016 baseline, though the company previously said it would decarbonize its products by 20% by 2030 and 45% by 2035 — a goal it has now discarded.
The resolution, filed in January by Follow This on behalf of 27 Shell shareholders, asks the oil major to align its medium-term emissions reduction targets for greenhouse gas emissions generated through the use of its energy products — scope 3 emissions — with goals outlined in the Paris Agreement. The proposal states that “no third-party source indicates that Shell’s medium-term targets are aligned with a 1.5°C warming scenario,” and notes that Shell “does not sufficiently demonstrate how it will reach these targets.”
Last week, in a notice issued ahead of its annual meeting, Shell advised shareholders to vote against the climate demands listed under resolution 23 as they were “against both good governance and shareholders’ interest” and also had “negative consequences” for its customers.
“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,” the notice said. Further, Shell’s directors said in the notice that they believed the resolution would also “not mitigate global warming” and “could potentially have the opposite impact and also negatively impact energy security.”
