Shell to Let Shareholders Vote on Shift to Cleaner Energy
By Sarah McFarlane
LONDON -- Royal Dutch Shell PLC detailed a first-of-a-kind
shareholder vote over its pivot away from oil, asking investors to
endorse its energy transition strategy in a nonbinding vote next
While environmental groups have long put forward climate-related
resolutions at annual shareholder meetings, Shell's move is the
first by an oil major to set up a regular review of its progress in
moving away from oil.
The decision to offer shareholders a vote comes as energy
companies face increasing investor pressure to map out their future
in a lower-carbon economy, where oil and gas demand is forecast to
fall, with the rollout of technologies such as electric cars and
wind and solar power.
Earlier this year, Exxon Mobil Corp. outlined plans for a
low-carbon business unit after some shareholders argued it should
focus more on investments in clean energy, while BP PLC has pledged
to cut oil output by around 40% over the coming decade and invest
more in renewable energy.
Shell laid out plans in February to reduce its dependence on
oil, saying it would cut output by 1%-2% a year, while boosting
spending on low-carbon energy.
On Thursday, the company published its first transition strategy
report for which it will seek shareholder approval. The document
sets out Shell's ambition to expand in electricity and biofuels,
while reducing the carbon intensity of the energy products it sells
by 20% by 2030 and 100% by 2050. Shell said its plans were aligned
with the global aim to limit global temperature rises to two
degrees Celsius, as set out in the Paris Climate Accord in
Some investors are skeptical of Shell's focus on reducing carbon
intensity -- the amount of carbon in any unit of energy -- instead
of absolute emissions.
"The big issue we have with Shell's current targets is that it's
fantastic for 2050, but it doesn't deliver enough absolute
emissions reduction in the next decade, which is critical," said
Mark van Baal from Follow This, a group of more than 6,000
shareholders in oil companies including Shell.
Follow This was among a group of shareholder and environmental
groups to earlier this year write to Climate Action 100+, an
investor group representing $54 trillion in assets, urging them "to
engage with Shell and refrain from endorsing their plans" until the
company strengthens its carbon-reduction targets.
The investor group plans to engage with Shell to ensure the
company also targets reductions in absolute emissions, said Adam
Matthews, chief responsible investment officer at the Church of
England Pensions Board, the investor that has led talks with Shell
on behalf of CA100+.
The Church of England Pensions Board is likely to vote in
support of Shell's energy transition plan, Mr. Matthews said.
Write to Sarah McFarlane at firstname.lastname@example.org
(END) Dow Jones Newswires
April 15, 2021 09:20 ET (13:20 GMT)
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