Shell faces high dissent on climate
May 25, 2023
Climate investors face disappointment as Shell shareholders vote against a resolution to reduce emissions in line with the Paris Agreement.
During Shell’s annual general meeting on May 23, shareholders rejected the resolution by a vote of 79.8% to 20.2% according to a preliminary count. This marks another year of high dissent against Shell’s climate plans.
The publication of the official results of the vote were delayed as climate activists and protesters stormed the meeting and created disruption.
Activist investor group Follow This first put forward the resolution urging Shell to align its climate targets with the Paris Agreement and commit to net-zero carbon emissions by 2030.
Dutch pension managers PGGM and MN as well as the Church of England Pension Board were among notable shareholders to express support for the resolution.
However, Shell CEO Wael Sawan urged shareholders to vote against to resolution as the oil giant had a “clear target of net-zero emissions by 2050”.
Sawan also defended the company against accusations it was failing to take swift action to switch from fossil fuels to renewable energy.
He stated the company had invested $4.3bn in low carbon energy, including biofuels, hydrogen, electric car charging and renewable power in 2022.
Climate investors faced further disappointment as the UK High Court decided not to proceed with ClientEarth’s case against Shell’s board of directors.
The lawsuit alleged Shell’s 11 board of directors had breached their legal duties for failing to implement an energy transition strategy that aligns with the Paris Agreement.
Several institutional shareholders, including UK pension funds Nest and London CIV, holding over 12 million shares in the company backed the lawsuit.
However, the case was dismissed as it “does not disclose a prima facie case for giving permission to continue to claim”.
ClientEarth has since been granted a hearing at the High Court to challenge the dismissal and request the judge to reconsider the decision.
Paul Benson, senior lawyer at ClientEarth, said: “This claim is about Shell’s Board adopting a strategy that is fit to manage the serious and significant climate risks facing the company – in line with its legal duties.
“We respectfully disagree with the terms of the Court’s decision, and in light of the importance of the issues raised by this case will ask the Court to reconsider.”
Last Updated: 26 May 2023