Shell’s climate goals came under fire at the company’s annual meeting as shareholders backed the strategy in lower numbers than last year and activists protesting against the energy major’s continued development of fossil fuels delayed proceedings for almost three hours.
Under the ornate domed roof of Central Hall Westminster in London, protesters, who all had to hold Shell shares to gain access, chanted and shouted as chair Andrew MacKenzie attempted to begin proceedings.
“Shell must fall” and “your profits will only drown us out for so long”, the group of about 50 shareholders shouted, as they promised to chain themselves to Shell’s “fossil fuel pipelines” and sung “we will stop you” to the tune of Queen’s 1977 hit “We Will Rock You”.
After 90 minutes, MacKenzie asked other shareholders to clear the room to enable police to arrive and remove the activists, some of whom claimed to have glued themselves to their chairs.
Like peers BP, TotalEnergies and ExxonMobil, Shell is attempting to satisfy an increasingly complex set of shareholder demands by continuing to generate healthy returns while overhauling its business to reduce its carbon emissions to net zero by 2050.
When the meeting finally restarted, two hours and 40 minutes late, 80 per cent of shareholders voted in support of Shell’s transition strategy and the progress it had made in the past 12 months. However, that was down from the 89 per cent that backed the plan when it was unveiled last year.
A rival resolution from Dutch shareholder activist group Follow This, which says Shell’s plan does not go far enough and is not aligned with the 2015 Paris climate accord, also curried less support. Just over 20 per cent of shareholders voted in favour of the Follow This resolution, compared with 30 per cent last year.
The AGM was Shell’s first in London since it simplified its Anglo-Dutch structure in December by relocating its headquarters to the UK.
Chief executive Ben van Beurden told shareholders who had not been evicted that Shell had “made significant” progress in its efforts to overhaul the business. By the end of 2021 the company had cut absolute emissions from its own operations by 18 per cent compared with 2016 and was committed to a 50 per cent reduction by 2030, he said.
The company had also reduced the carbon intensity of the products it sells by 2.5 per cent compared with 2016, and was targeting a 9-12 per cent reduction by 2024, van Beurden added. “We are reinforcing Shell to deliver a secure supply of energy in the places where it is needed most.”
Follow This, which submits the same resolution at several oil and gas companies, argues that Shell must commit to an absolute reduction in the scope 3 emissions generated from the fuels it sells. Shell’s targets are for a reduction in the carbon intensity of its products, a metric that reflects the relative emissions of all of its energy, including low and zero-carbon solutions.
Follow This founder Mark van Baal said the vote for its resolution remained significant. “Twenty per cent is still a shareholder rebellion and we have to work with them because they see that these companies, not only Shell, are not going to change their business models of their own accord,” he said.
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here
Source: Financial Times