Climate activists protest outside the
Shell annual general meeting at the ExCel center in London, U.K., on
Tuesday, May 23, 2023. The protests come as Shell faces a
shareholder vote on a measure to increase its climate ambitions
following a year of record profits at the company.
Bloomberg | Bloomberg | Getty Images
LONDON — Shell Chief Executive Wael Sawan and the firm’s board of
directors on Tuesday were shielded by security staff as climate
protesters unsuccessfully tried to storm the stage at the British oil
giant’s annual shareholders meeting.
The acrimonious meeting, which was held at the ExCeL London exhibition
center, was repeatedly disrupted by protesters before they were
removed by security staff.
Proceedings were scheduled to get underway at 10 a.m. London time (5
a.m. ET) but waves of disruption delayed the meeting for well over an
hour.
Protesters could be heard singing to the tune of “Hit the Road
Jack,” “Go to hell, Shell, and don’t you come back no more” as Sawan,
Chairman Andrew Mackenzie and other directors looked on.
It comes as climate-focused investors seek to ramp up pressure
on the energy major after an extraordinary run of record profits.
Follow This, a small Dutch activist investor and campaign group
with stakes in several Big Oil companies, tabled a resolution at
Shell’s shareholders meeting.
Climate Resolution 26 calls on Shell to align its climate targets with
the landmark Paris Agreement and commit to absolute carbon emissions
cuts by 2030. These cuts, Follow This says, should include emissions
generated by customers’ use of their oil and gas, known as Scope 3
emissions.
It echoes a 2021 ruling by a Dutch court that Shell should
reduce its global carbon emissions by 45% by the end of the decade,
which the company has appealed.
For the first time, Dutch pension managers MN and PGGM — both
Shell shareholders — have endorsed the resolution. The institutional
investors lead engagement with Shell on behalf of the world’s largest
climate-focused investor group Climate Action 100+, which represents
$68 trillion in assets.
It comes as investors increasingly see a warming planet as a
growing risk to their portfolios. The burning of fossil fuels, such as
oil, gas and coal, is the chief driver of the climate crisis.
Meanwhile, the Church of England Pensions Board, Britain’s
Local Authority Pension Fund Forum, the U.K.’s National Employment
Savings Trust, and shareholder advisor PIRC have said they will either
vote against or recommend a vote against the reappointment of Shell’s
Mackenzie.
Adam Matthews, chief responsible investment officer at the
Church of England Pensions Board, reportedly said earlier this month
that it had “lost confidence in the direction of the company.”
Shell, which is aiming to become a net-zero emissions business
by 2050, has recommended shareholders vote against the motion tabled
by Follow This. The company described Climate Resolution 26 as
“unclear, generic and would create confusion as to Board and
shareholder accountabilities.”
“We strongly disagree with the Follow This resolution and with
those organisations which have recommended supporting it, or voting
against Board members. There must be an emphasis on changing the use
of energy as much as its supply, and this is reflected in our
approach,” a spokesperson for Shell said in a statement.
“We will continue to invest in producing the energy the world
needs today and for the foreseeable future. All of our investments
have to provide a rate of return that our investors demand,” they
added.
Proxy advisors Glass Lewis and Institutional Shareholder
Services have both recommended that their clients vote against
Resolution 26.
Follow This said it represents nearly 10,000 Shell
shareholders, although the majority hold only a couple of shares.
It is unlikely that those planning to vote in favor of the
resolution will trigger a broader shareholder revolt or succeed in
ousting board members, but Follow This says it hopes investors take
the opportunity to compel the company to align their 2030 emissions
reduction targets with the Paris accord.
At BP’s annual general meeting last month, support for a Follow
This resolution calling for tougher emission reduction targets by the
end of the decade came in at 17%, although this was up from 15% last
year.
Bumper profits
Big Oil posted bumper profits last year, bolstered by soaring
fossil fuel prices and robust demand following Russia’s full-scale
invasion of Ukraine.
For its part, Shell reported its highest-ever annual profit of
nearly $40 billion for 2022. That comfortably surpassed the $28.4
billion in 2008 which Shell said was its previous annual record and
was more than double the firm’s full-year 2021 profit of $19.29
billion.
Earlier this month, Shell posted adjusted earnings of $9.6
billion for the first three months of 2023.
The record profits were seen from within the industry as
something of a vindication. Oil and gas giants came under immense
pressure from shareholders and activists to invest in clean energy as
oil demand cratered in the peak of 2020 Covid lockdowns.
The push toward green reform lost momentum last year, however,
alarming investors and campaigners as the world’s leading climate
scientists warned of “a brief and rapidly closing window to secure a
livable future.”
After ultimately failing with several climate resolutions in
2022, Follow This’ Mark van Baal told CNBC earlier this year that it
was clear from discussions with oil majors that they were determined
to fend off activist and shareholder pressure and continue with their
core oil and gas businesses.
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