Shell Welcomes Activist Investor's Decision on Climate Resolution -- Update
April 08 2019 - 7:39AM
Dow Jones News
--Enviromentally focused investor group Follow This to withdraw
climate resolution at AGM
--The move aims to give Shell more time to align goals with
Paris accord and is backed by key Dutch investors who will monitor
the company's progress
--Follow This has similar resolutions planned for Equinor, BP
and Chevron
By Oliver Griffin
Activist investor Follow This won't put forward a climate
resolution at Royal Dutch Shell PLC's (RDSB.LN) annual general
meeting this year to give the oil major more time to align itself
with Paris Agreement objectives, a move that the company welcomed
on Monday.
On Sunday, the Netherlands-based group of some 4,600
shareholders, which urges oil-and-gas companies to set long-term
greenhouse gas emissions targets in line with the 2015 Paris
accord, said it will withdraw its climate resolution from the
agenda of the Anglo-Dutch company's AGM.
Shell said Monday it looked forward to receiving the formal
documentation which supports the decision, which Follow This said
it took based on the progress that Shell has made so far.
Follow This's decision follows discussions with six of Shell's
top 10 Dutch investors--including Aegon NV (AGN.AE), NN Investment
Partners and Van Lanschot Kempen NV (VLK.AE)--which have previously
supported climate resolutions from the activist group. Follow This
member Mark van Baal said it was due to these six companies'
support for its climate resolutions that Shell had developed its
"industry-leading" goals.
"Our mission is to have the entire oil-and-gas industry, which
can make or break the Paris Climate Agreement, commit concretely to
Paris and actually begin to invest in a sustainable energy supply,"
he said.
Follow This said its climate resolutions remain on the agendas
of the AGMs of Equinor ASA (EQNR.OS), BP PLC (BP.LN) and Chevron
Corp. (CVX).
Shell's climate goals are regarded as industry leading by Follow
This in part because the company includes so-called Scope 3
emissions in its greenhouse gas-reduction targets. In this case,
Scope 3 emissions are those generated by the fuels burned by Shell
customers worldwide.
"Oil-and-gas companies had previously always taken the position
that the emissions of their products fell outside the domain of
their own responsibility," Mr. van Baal said.
Still, Follow This has pledged to keep up the pressure on Shell
over emissions targets.
Mr. van Baal said: "Shell hasn't heard the last from us. We want
Shell's investments to be aligned with Paris."
He said Shell's current targets aim for a reduction of just 30%
in absolute carbon emissions by 2050. An energy company looking to
bring its emissions targets in line with the Paris agreement would
need to aim for a reduction of 65% to 90%, Follow This said.
Speaking on behalf of the six Dutch investors in Shell that back
Follow This, NN Investment Partners' head of responsible investing,
Adrie Heinsbroek, said: "We appreciate Shell's positive steps to
align its climate ambitions with The Paris Agreement and encourage
them to continue the transition. We are giving Shell this year to
align its climate ambitions."
"We will continue to monitor closely and actively engage with
Shell in the coming months and years," Mr. Heinsbroek said.
Last week Shell surprised the industry by saying it won't renew
its membership with the American Fuel & Petrochemical
Manufacturers in 2020 due to a material misalignment over climate
policy. Shell decided to part ways with the trade association after
conducting its first review on its association with 19 industry
groups.
In March, Shell had said it aims to cut its net carbon footprint
by up to 3% by 2021 compared with 2016, as it works to meet its
goal of halving its greenhouse-gas emissions by 2050.
Last year, the Anglo-Dutch company said it would provide three-
to five-year targets beginning in 2020 to reduce its net carbon
footprint on an annual basis. Shell said it plans to incorporate
the targets into a revised remuneration policy, which will be
subject to a shareholder vote in 2020.
Write to Oliver Griffin at oliver.griffin@dowjones.com;
@OliGGriffin
(END) Dow Jones Newswires
April 08, 2019 07:24 ET (11:24 GMT)
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