CA100+ absent from climate proposal at Total but welcomes Shell’s net-zero ambition

Members of Climate Action 100+ (CA100+), the multi-trillion investor engagement initiative targeting the world’s dirtiest companies, have welcomed today's commitment by Shell to become a “net-zero emissions energy business by 2050 or sooner”.

The Church of England Pension Board and Dutch investor Robeco are leading on engagement with the Anglo-Dutch oil giant on behalf of CA100+.

But Mark van Baal, Founder of Dutch not for profit Follow This, has criticised the announcement by Shell, saying the new ambition “is not a target and is not Paris-aligned yet”. 

“This will not lead to a radical shift in Shell's spending away from fossil fuels to renewables,” he said.

Follow This has again filed a proposal at Shell this year calling on it to set and publish concrete climate targets. But Shell’s board is recommending in its Notice of Annual Meeting, also published today, that shareholders vote it down, describing it as “unnecessary and potentially counterproductive” in light of the steps it is taking. 

One of the “additional” steps included in today’s announcement is that Shell plans to reduce the “Net Carbon Footprint” of the energy products it sells “by around 65% by 2050 (increased from around 50%), and by around 30% by 2035 (increased from around 20%)”. 

But Joe Brooks, Project Officer at shareholder advocacy NGO ShareAction, told RI that it is absolute emission reductions that are needed. 

“Intensity targets run counter to the science by giving oil majors space to keep constant or even grow their fossil fuel business in absolute terms as long as they also add low-carbon energy to their portfolios”, he said.

“At its 2019 Management Day, Shell was clear that it planned to ‘fully sustain the upstream business through the next decades’,” Brooks pointed out. “This is concerning given that at least 30-40% of Shell's capex is incompatible with the Paris climate goals”. 

Absolute emissions reduction targets are, however, being asked of Shell’s French rival Total, in another shareholder proposal announced yesterday.

11 European investors — including Actiam, Candriam and Sycomore — are proposing that Total amend its articles of association so that it must report yearly on its efforts to align with Paris, including disclosing “appropriate targets” for the “reduction of direct or indirect greenhouse gas emissions”.

Despite the fact that Total is a CA100+ target company, and the majority of the proposal’s co-filers are CA100+, RI understands that the Total proposal is not considered to be a CA100+ initiative. 

“CA100+ members will individually assess if they want to support the resolution or not,” said Ruud Hadders, Responsible Investment Officer at Dutch investment manager Actiam. 

BNP Paribas Asset Management, which is the lead engager on Total at CA100+, has not participated in the submission of the proposal and a spokesman for the asset manager did not confirm whether it would support the proposal at a vote. 

“Through our membership of the CA100+ coalition we are currently co-leading an engagement directly with Total, in conjunction with other shareholders, to encourage them to act in order to meet the objectives of the Paris Agreement,” he added.

Actiam’s Hadders told RI that Total has taken “some positive steps”, such as setting some short-term targets to reduce the “carbon intensity of their processes and of their products”. But he added that it is “very important that we understand where the company is moving over the long term". 

Dennis van der Putten, Director of Sustainability at Actiam, described the proposal, which is unusual in France, as a “clear statement”. 

“We want to have both financial and social returns. We’d rather have Total change their behaviour and act in accordance with a 2°C scenario or the Paris agreement than exclude them, which is really a last resort”.