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.
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