Shell Urges Shareholders to Reject Activist’s Pressure to Hastily Abandon Fossil Fuels
•Begins withdrawal of staff in Russia
Emmanuel Addeh in Abuja with agency report
Shell Plc’s board has told shareholders to reject a Dutch activist group’s resolution that asks the energy company to set more stringent climate goals.
It said that adopting the “Follow This” vote, which wants the company’s policies to be more consistent with the Paris climate accord, “could result in unrealistic interim targets that are harmful” to its own energy transition strategy and good governance.
Even in Nigeria, some International Oil Companies (IOCs), including Shell, have announced plans to exit onshore and shallow water operations in line with their plan to focus on cleaner sources of fuels.
But the climate activists insist that the oil companies must do more to completely abandon hydrocarbons in the nearest future.
To convince investors that its already doing enough, Bloomberg reported that Shell will put its energy transition progress report to a non-binding vote at the annual shareholder meeting scheduled for May 24.
The company won the backing of 89 per cent of investors when it put the green plan to the ballot for the first time last year. Shell said at the time that it would publish an updated strategy every three years, and seek an advisory vote on its progress every year.
At the same time, the activists’ climate proposal that’s similar to the one filed this year received 30 per cent votes in favour, the most it has ever garnered since it began filing with Shell in 2016.
Climate conscious investors and groups enjoyed one of their most successful years ever in 2021. Shareholders voted for reducing emissions at Chevron while a small hedge fund managed to appoint new members to Exxon Mobil’s board. Besides Shell, the activists’ resolutions filed with BP Plc and Equinor ASA received more support than ever before.
But Shell has said that it’s making strong progress toward net-zero carbon by 2050, with “critical investment decisions” in solar energy, wind and hydrogen.
The company cut absolute emissions from its operations and the energy it uses to run them by 18 per cent last year from 2016 levels and aims to halve them by the end of this decade.
Progress on the key scope 3 emissions — which make up the bulk of its greenhouse gases and are associated with the end-use of its products — were little changed last year.
The company’s Annual General Meeting (AGM) will be held in London for the first time since the unification of Royal Dutch Petroleum Co. and Shell Transport & Trading Co. in 2005.
Since then, shareholders had been assembling in The Hague where Shell was based, before it shifted its headquarters to the UK capital.
Meanwhile, Shell has started to withdraw staff from its joint ventures with Russia’s Gazprom as it moves forward with plans to exit investments in response to the war in Ukraine.
Dozens of Shell employees on temporary assignment at the Sakhalin-2 liquefied natural gas export project in Russia were removed over the weekend to be relocated back to other offices, according to people with knowledge of the matter.
According to Bloomberg, operations at the facility are unlikely to be affected by the move.
“Our key focus in this process is safety of our people and operations and compliance with applicable laws,” a Shell representative was quoted as saying.
Some of the world’s top energy producers, including Shell and Exxon Mobil, pledged to exit Russian projects in a bid to reduce reputational damage after Moscow’s military offensive in Ukraine.
Shell said earlier this month the withdrawal will result in $4 billion to $5 billion of impairments.
London-based Shell had increased its effort to distance itself from Moscow after the company came under fire in early March for purchasing Russian crude at a steep discount.
Since then, Shell said it won’t make any new purchases of Russian oil or gas. The energy major has also idled LNG vessels chartered from Russian companies.
