Wael Sawan, who assumed CEO role in January 2023, announced a shift in Shell’s trajectory last year, steering towards the ambition of becoming a net-zero carbon emitter by 2050.
In a historic move, a coalition of 27 investors, collectively managing around $4 trillion in assets and holding approximately 5% of Shell’s shares, has jointly filed an independent resolution pushing the energy giant to adopt more stringent climate targets. Spearheaded by the activist shareholder organization Follow This, this resolution is poised to be a pivotal moment and is slated for a vote at Shell’s upcoming annual general meeting later this year.
The investors in this coalition include major entities such as Amundi, Scottish Widows, Rathbones Group, and Edmond de Rothschild Asset Management, amplifying the significance of their call for enhanced climate action from one of the world’s leading energy corporations.
The resolution, echoing past initiatives by Follow This, calls on Shell to align its medium-term carbon emissions reduction targets with the Paris Climate Agreement, encompassing the often contentious Scope 3 emissions – emissions resulting from the use of Shell’s products by consumers. Currently, Shell aims to halve its operational emissions by 2030 and decrease the overall emissions intensity, covering Scope 3.
This move intensifies pressure on Shell at a time when CEO Wael Sawan is striving to bolster the company’s profits, partly by slowing investments in renewables and amplifying fossil fuel production.
The resolution mirrors a similar effort by Follow This last year, which garnered support from 20% of shareholders amid a tumultuous annual general meeting where protesters attempted to disrupt proceedings.
Diandra Soobiah, head of responsible investment at the British pension scheme NEST, emphasized the coalition’s call for Shell to establish a credible Scope 3 absolute emissions target. Soobiah asserted that such a commitment would showcase leadership, affirm Shell’s dedication to transitioning its business, and contribute to tangible global change.
In response, Shell defended its climate targets, asserting alignment with the 2015 Paris agreement’s goal to restrict global warming to “well below” 2 degrees Celsius by 2100. The company dismissed the Follow This resolution as unrealistic and simplistic, contending it would have no meaningful impact on climate change mitigation, potentially harm customers, and run contrary to the company’s and shareholders’ interests.
Wael Sawan, who assumed the CEO role in January 2023, announced a shift in Shell’s trajectory last year, steering towards the ambition of becoming a net-zero carbon emitter by 2050. The company is set to release its inaugural energy transition strategy update early this year, subject to an advisory vote at the upcoming annual general meeting.
As Shell grapples with growing scrutiny over its climate strategy, this resolution represents a groundbreaking challenge from a formidable investor collective, setting the stage for a pivotal moment in corporate climate responsibility.