Latest Follow This resolution at Shell risks opposition from Climate Action 100+ investors
Church of England Pensions Board wants the proposal withdrawn after Shell climate pledges
Share-owning activist group Follow This has filed its fourth climate change proposal at Shell, just days before today’s Shell and Climate Action 100+ (CA100+) joint statement in which the oil major committed to setting targets, rather than just having “ambitions”, to reduce its net carbon footprint – including Scope 3 emissions.
Seen by RI, the latest proposal reflects the one voted at the AGM in May, encouraging shareholders to support Shell’s alignment with the Paris Agreement by requiring it to set and publish emissions reduction targets and measurable metrics “well below 2ºC”.
Follow This filed the proposal last week, but today investors from the coalition CA100+ have published a joint statement with Shell, in which it pledges to “operationalise” its “long-term ambition” by setting “specific targets for shorter-term periods (three or five years)”.
The target setting, which will be integrated into executive remuneration, will start from 2020 and run to 2050.
The lead institutional investors engaging with Shell on behalf of CA100+ are Robeco and the Church of England Pensions Board.
Adam Matthews, Co-lead of the CA100+ dialogue with Shell, and Director of Ethics and Engagement at the Church of England Pensions Board, told RI that Shell’s announcement is “market-leading and sets it apart from other oil and gas companies.”
Matthews said: “Does engagement deliver results? Well, there is clear evidence with this joint statement that the company has listened to the shareholders. It has embedded this ambition into a framework of rolling targets and into executive pay.”Mark van Baal, founder of Follow This, told RI that today’s announcement is a “huge step”, but that it “would not have happened without the support of the fellow shareholders” on the Follow This resolutions at the previous AGMs.
Asked whether Shell’s climate pledges could undermine support for the 2019 AGM, Van Baal said: “Not at all. It is still a promise and they need support for it, that’s what we are offering Shell.”
He added: “I hope they [members of the CA100+ initiative] would support the resolution, but more important that they file climate resolutions with other companies.”
Matthews, however, told RI that while he recognises the positive role that Follow This has played, particularly bringing attention and focus to targets, he would prefer the shareholder proposal to be withdrawn.
“I don’t think we need to do this through shareholder resolutions with Shell. I think the company has shown they have been responsive to that engagement and the focus does need to be on other companies.”
Matthews said that there is no CA100+ common position on the resolution and that “it would evolve if the resolution stays.”
Follow This’s climate proposal was this year backed by 5.1% of the votes, with 7.2% of abstentions.
Among them “were”:ttps://www.responsible-investor.com/home/article/agm_results_test_shells_commitment_to_paris_goals/ the Church of England Pensions Board, Ircantec, the French public-sector pension scheme managed by Caisse des Dépôts, and AX IM. h