Shell rapped at AGM for weakening climate strategy

Almost one-fifth of Shell’s shareholders called on the firm to set stronger emissions reduction targets at its AGM in London this week, which was interrupted by protestors accusing the business of greenwashing.

Shell rapped at AGM for weakening climate strategy

The AGM took place on Tuesday (21 May). Attendees told members of the press that many attendees raised concerns about Shell’s strategy for shifting its energy production mix and reducing emissions.

The firm’s chief executive Wael Sawan last summer scrapped a target to decrease fossil fuel production by 55% through to 2030, partly in light of the increased profitability of oil and gas amid the energy price crisis.

Subsequently, Shell scaled back its renewable energy pipeline by around 10%. Sawan spoke of a wish to take a “much more selective approach” to renewables investment to cut costs.

Investors had a chance to vote on these changes to the company’s strategy. Ultimately, 78.2% voted in support of the updated approach. Investors also voted in support of Shell’s management team, but there was some dissent.

Shell’s chairman Sir Andrew MacKenzie told investors at the AGM that the business may not be aggressively pursuing the energy transition this decade, but plans to ramp up efforts in the longer-term.

He said:  “The speed and shape of change can be huge and people often over-estimate this in the short term but under-estimate what can change in the long term.

“While it might be tempting to stop using oil and gas before the world is ready, we must not do so at the expense of the energy needs and aspirations of the global populations.”

Protestors accused Sir MacKenzie of greenwashing and of greed at the detriment of the environment, before being removed by security.

Also at the AGM, attendees had the opportunity to vote on a resolution filed by activist shareholder Follow This, which would have compelled Shell to set a Scope 3 (indirect) emissions target aligned with climate science.

The resolution received 18.6% support with notable backers including Amundi and Scottish Widows.

Shell has pledged to cut overall emissions from the end-use of its oil and gas products by 15-20% by 2030, against a 2021 baseline. A Dutch court has ruled that alignment with climate science would entail a 45% reduction in emissions across all scopes by 2030, against a 2019 baseline.

Oil and gas majors Chevron and ExxonMobil will host their AGMs next week. Like Shell, they will face climate-related shareholder proposals.

Strategy loopholes

On the day of Shell’s AGM, Oil Change International published a new analysis of the climate plans of eight of the world’s largest oil and gas firms, concluding that no meaningful progress has been made to align them with a 1.5C trajectory.

The analysis covers Shell, BP, ConocoPhillips, ExxonMobil, Eni, TotalEnergies, Chevron and Equinor.

The firms are collectively aligned with a world in which global heating breaches the 2.4C mark above pre-industrial levels. Scientists have stated that warming beyond 1.5C, and especially 2C, would render many places “unliveable”, impacting at least a third of the population globally.

Oil Change International assessed companies’ level of ambition to cut emissions; the integrity of the methods they intend to use to cut emissions; and their commitment to a just transition which is centred on public and worker livelihoods.

Every firm was ranked as having either “insufficient” or “grossly insufficient” plans in the majority of the metrics covered.

Common issues include an over-reliance on carbon capture and storage, the heavy use of carbon offsetting and the use of carbon intensity targets which ultimately leave room for firms to grow their overall footprint.

Several previous analyses have reached the same conclusion. In fact, oil and gas majors are excluded from participating in the UN-backed Race to Zero campaign due to a lack of credible net-zero transition plans across the industry.

Comments (1)

  1. Rob Heap says:

    From this report, it is clear that the majority of shareholders and the Shell executives value monetary wealth and not environmental wealth.
    This is disgusting.

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie