Royal Dutch Shell has won shareholder support for its energy transition plan, but the oil company has faced growing support for demands from a group of activists to set more ambitious targets to tackle climate change.
At the company’s annual meeting of investors, nearly 89% of shareholders voted on Tuesday in favor of Shell’s strategy to create a net-zero emissions company by 2050.
The shareholder survey on corporate strategy, while non-binding, was unprecedented for a major oil and gas company, and failed to achieve the over 95 percent support that is customary for proposals put forward by the direction.
Shell also faced a shareholder rebellion following a separate resolution by Dutch shareholder group Follow This that the oil company should set more ‘inspiring’ goals for itself, which drew support from 30% of shareholders. .
Even though the proposal failed to meet the 75% threshold required to pass, the group managed to more than double its base of support from a similar vote last year. UK corporate governance rules require Shell to now consult with these shareholders and report within six months.
“Shareholders are sending a strong signal that Shell will have to set new targets,” said Mark van Baal of Follow This, which filed a similar resolution last week with its rival. BP shareholders meeting.
The meeting coincided with a new report by the International Energy Agency, saying all new oil, gas and coal projects should cease if the goals of the 2015 Paris Agreement were to be met. He also said demand for oil is expected to decline nearly 75% by 2050, while gas consumption is expected to halve.
Shell, meanwhile, will continue to explore new areas for oil and gas through 2025. It also plans to invest the bulk of its cash in hydrocarbons for the foreseeable future, while aiming to reorient spending on cleaner fuels “over time”, expanding its low-carbon businesses and offsetting emissions.
Oil and gas companies have faced backlash from environmentalists and some investors who believe they are not taking enough drastic action to tackle climate change.
But executives are in a conundrum – how to get away from lucrative oil and gas production that pays dividends to investors that shareholders still seek when low-carbon companies still aren’t able to generate as much cash.
Shell chief executive Ben van Beurden said if the company was to “accelerate the transition” of its business to cleaner fuels, it must do so not only “for a purpose” but also “for a profit”.
“If we were to reduce the [fossil fuel] the company’s footprint. . . would that help society? No, ”van Beurden told shareholders. “If we do not provide [this oil and gas], someone else would.
While Shell plans to reduce emissions in absolute terms by 2050 to zero, its shorter-term goals focus largely on “energy intensity,” a measure of carbon per megajoule of energy sold, which has made the impact. object of criticism.
Additional reporting by Attracta Mooney
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