Climate Pressure on Shell Is Warning to Oil Industry
May 21 2018 - 11:54AM
Dow Jones News
By Sarah Kent
Investors are upping the ante on big oil companies over climate
change, demanding they take more concrete action to help curb
global warming.
The issue is set to come into focus at Royal Dutch Shell PLC's
annual meeting Tuesday where investors with nearly $8 trillion
under management will call on the company to go beyond already
ambitious plans to curb emissions, according to a copy of the
statement seen by The Wall Street Journal.
The statement stops short of throwing full support behind a
shareholder resolution that would require the company to set
targets aligned with international efforts to limit climate change,
but signals strong support among investors for further
measures.
The demands represent a shift in approach from investors, who
have until now largely focused on requesting more transparency
around climate risk.
Pressure on big oil companies over climate change has been
rising since the signing of the 2015 Paris accord, under which
nearly 200 nations agreed to limit average global temperatures from
rising more than 2 degrees Celsius, or 3.6 degrees Fahrenheit,
above preindustrial levels. The Trump administration has vowed to
pull out of the pact.
Last year, the world's largest money manager, BlackRock Inc.,
supported a shareholder revolt at Exxon Mobil Corp. that called for
more climate disclosure. Since then, investors with roughly $30
trillion in assets under management have signed on to a five-year
effort to reduce emissions and improve transparency and governance
around climate at the world's biggest corporate polluters. Last
week, investors with more than $10 trillion under management sent
an open letter to the oil industry calling for more action on
climate.
"We want action," said Helena Viñes Fiestas, head of
sustainability research and policy at BNP Paribas Asset Management,
which signed the letter published in the Financial Times last
week.
Investor efforts are already driving change. Shell has said it
wants to halve its carbon footprint -- including emissions caused
by drivers who burn Shell fuel -- by 2050.
In Tuesday's statement, the signatories will request Shell
translate that ambition into "firm medium and short term targets,"
according to the copy seen by the Journal.
Some shareholders have also thrown their support behind a
resolution -- subject to an investor vote at the meeting Tuesday --
that would require Shell to set targets. The proposal was made by
Follow This, a Dutch activist shareholder group focused on pushing
Shell to become a sustainable energy company.
A similar resolution from the same group last year only gained
support from 6% of voting shareholders, but helped push Shell to
include third-party emissions in carbon reduction plans -- an
unprecedented move in the industry.
Shell has urged investors to vote against this year's resolution
on the grounds that targets are too rigid and that the company has
already set more ambitious goals.
The resolution isn't expected to gain a majority vote, but it
could still provide a template to pressure other companies to more
action, investors said.
"It's the right resolution at the wrong company," said Matt
Crossman, stewardship director at U.K. investment manager Rathbone
Investment Management Ltd.
Members of the Institutional Investors Group on Climate Change
are discussing whether the resolution could be used to nudge other
companies toward more action, Mr. Crossman said. Members of the
investor network determine whether to act on such motions on an
individual basis.
"You're seeing the emergence of the next generation of
shareholder resolutions that I would imagine in time will become
very mainstream requests," said Adam Matthews, head of engagement
at the Church of England's endowment and pension fund.
The church has played a role in pushing for more disclosure on
climate risk, including at Exxon last year. The U.S. company has
since published a climate report and dedicated a portion of an
analyst day to the subject.
Climate was also a focus at BP's annual meeting Monday, though
the company faced no special shareholder vote this year. Last month
it published a report that laid out for the first time targets to
lower its carbon and methane emissions.
Write to Sarah Kent at sarah.kent@wsj.com
(END) Dow Jones Newswires
May 21, 2018 11:39 ET (15:39 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Royal Dutch Shell (NYSE:RDS.A)
Historical Stock Chart
From Feb 2024 to Mar 2024
Royal Dutch Shell (NYSE:RDS.A)
Historical Stock Chart
From Mar 2023 to Mar 2024