Shell Investors Unite With Activist Group Urging Greater Carbon Emissions Cut

Laura Hurst
Mon, January 15, 2024


(Bloomberg) -- Funds managing more than $4 trillion of assets have joined forces with climate activist Follow This to intensify the pressure on Shell Plc to slash its greenhouse gas emissions.

The group, which includes Europe’s largest asset manager Amundi SA, will co-file a shareholders’ resolutions pushing Shell to align itself with the Paris Climate Agreement, according to a statement on Monday. This is a step further than the investors have gone in previous years, when they voted in support of resolutions filed by Follow This.

“This escalation of 27 leading investors puts the call for emissions reductions by energy companies front and center,” Follow This founder Mark van Baal said in the statement.

The resolution focuses on so-called Scope 3 emissions — those generated when customers use oil companies’ products that make up the bulk of their greenhouse gases. It asks Shell to align its medium-term Scope 3 reduction target with the goals of the Paris Climate Agreement to limit global warming to well below 2C above pre-industrial levels.

“We remain committed to constructive engagement with our shareholders, and we believe our climate targets are aligned with the more ambitious goal of the Paris Agreement,” a Shell spokesperson said. “The 2024 resolution from Follow This is broadly unchanged from their 2023 submission, which was rejected by shareholders.”

As well as Amundi, the group of co-filing investors includes pension provider Scottish Widows, Candriam, Rathbones Group, and Edmond de Rothschild Asset Management. The 27 investors collectively own around 5% of Shell stock, according to Follow This.

Their direct involvement in the filing is a coup for the activist group after support for its shareholder resolutions at oil majors has fallen from a peak reached in 2021.

“Escalation is necessary if investors want to urge major CO2 emitters to review their business model in order to reach global climate targets,” Vincent Kaufmann, chief executive officer of the Ethos Foundation, which represents five Swiss investors, said in a statement.

The group understands the need for fossil fuels in the short-term but “we see the need for open communication and a clear strategy” on the transition away from hydrocarbons, Jan Peterson, a senior portfolio manager at Swedish pension fund AP4, said in the statement.

Shell has come under increased scrutiny from environmentalists and climate-conscious investors after it raised the proportion of annual investments that go into fossil fuels last year. Each year, the company seeks an advisory vote on the progress of its energy transition strategy, which will be updated before the annual general meeting in May.

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