Dutch campaign group drops Shell climate resolution after “intensive discussions” with big investors

Move by Follow This comes after meetings with prominent supporters

Dutch campaign group Follow This is to withdraw the climate change proposal it has filed at Shell, after meetings with its most prominent supporters, the Dutch institutional investors who have voted for similar resolutions in the previous three years.

Among them are Aegon, NN Investment Partners, MN, Achmea, Van Lanschot Kempen, Actiam and Blue Sky Group — with whom Follow This says it has had “intensive discussions”.

They have agreed to give Shell more time to achieve its climate ambitions, particularly attempting a closer alignment with the Paris goals.

The resolution has faced opposition not only from Shell but from investors from the Climate Action 100+ (CA100+) initiative, who have called on Follow This to withdraw the resolution.

Follow This filed the resolution in December just days before the CA100+ investors announced it had reached an engagement deal with Shell.

In a joint statement with CA100+, Shell pledged “to set short-term targets” as steps to achieve its “long-term ambition” of reducing emissions.

As part of this engagement, Shell also pledged to link these three-five year targets to executive remuneration.

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 at the time of the CA100+ announcement:

“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, while acknowledging Follow This’s contribution, reiterated his preference for the withdrawal of its resolution at the ICGN conference in Amsterdam in February.According to Follow This, Shell’s Net Carbon Footprint Ambition still falls short of being defined as Paris-compliant.

Follow This says it had “intensive discussions” with Aegon, NNIP, MN, Achmea, Van Lanschot Kempen, Actiam and Blue Sky Group

Follow This says a 50% reduction of “relative emissions” by 2050 translates into a 30% reduction of “absolute emissions”, considering the energy demand increase of 40% expected by Shell’s own Sky Scenario by 2050.

“An energy company that wants to bring its emissions targets into line with Paris would therefore have to have an emission reduction target or ambition of 65% to 90% by 2050,” it says.

At Shell’s 2018 AGM, CEO Ben van Beurden said: “We have ambitions that are completely consistent and compatible with the Paris agreement.”

Mark van Baal, founder of Follow This, has challenged such a statement on the grounds that it is misleading for shareholders.

Follow This filed another resolution at BP overlapping with the engagement activity of CA100+, which in this instance has taken a form of a resolution pre-agreed with the company.

As such BP shareholders could face a dilemma over two similar climate resolutions, one filed by Follow This that will likely be opposed by the company, and another one by CA100+ coalition which BP supports.

Follow This has also filed similar climate resolutions demanding scope 3 emissions reporting at Norway’s Equinor, and co-filed at Australia’s Santos, Woodside Petroleum and US-based Chevron.

The four companies are also targeted by CA100+.