

As the company holds its AGM in The Hague today, I have a confession to make: I have warm and fuzzy feelings about Royal Dutch Shell.
The company, a systemically important carbon emitter (SICE) in the original words of the Climate Action 100+ initiative (the phrasing was later dropped), faced investors today amid a climate crisis … and was hailed as a global leader by them.
Has Shell played a blinder in neutralizing potentially highly critical investors by stringing them along with their joint statement
and talk of a new basis for working together?
So why do I have warm feelings about Shell? Partly it’s because some of my happiest childhood memories are of visits to a country house owned by… the chairman of Shell, where my grandparents were cook and chauffeur. So my memories have always made me well disposed towards the company.
And whenever I meet Shell people nowadays, such as Sir Mark Moody-Stuart, the former CEO who has been involved with the Global Compact and Hermes EOS etc., I find it difficult to reconcile such positive impressions with what we know of the company’s history.
These include the environmental issues in the Niger delta, the 2004 reserves mis-stating scandal, the Brent Spar controversy. But despite this charge sheet I find it hard to demonise Shell.
You probably have warm feelings about Shell too, as it provides big dividends and is doing its bit (at least compared to some of its peers) about climate change.
It ‘gets it’ in a way Exxon doesn’t. It’s part of the solution, not part of the problem. And it’s definitely not the actual problem itself.
With much investor attention focused on peers in the US like Exxon Mobil, Shell has somehow managed to largely sidestep the negative headlines and is apparently working with investors for the greater good. It’s opened a channel of communication with shareholders, which is obviously A Good Thing.We’ve noted before how one person close to the negotiations with Shell has likened it to a game of chess. The investors have deployed one of the most powerful pieces on the chessboard, a bishop (indeed, an Archbishop): Justin Welby.
Stretching the analogy, there’s even an expendable pawn caught in the cross-fire: the Dutch campaign group Follow This.
And (final chess reference) what is the endgame? With the likes of Generation Investment Management calling time on the “quiet diplomacy” of shareholder engagement, where – ultimately – does that leave the Shell-investor entente cordiale?
InfluenceMap has found that the five largest listed oil and gas majors, including Shell, have invested over $1bn of shareholder funds in the three years following the Paris Agreement on what it terms misleading climate-related branding and lobbying.
The research calls out “carefully devised campaigns of positive messaging combined with negative policy lobbying on climate change”.
This was picked up today, with Adam Matthews of the Church of England saying climate lobbying is an “obstacle to progress”.
Speaking at the AGM, he said lobbying, for companies with “commitments to responsible business behaviour and the goals of the Paris Agreement”, risk having these “undermined” when they put resources behind lobbying or industry associations “that are not aligned with their core corporate commitments and values”.
At best the company is speaking with two voices, at worst it is pulling the wool over investors’ eyes. We must hope it is not the latter and that the outcomes are genuinely positive in the long term.
I have another confession. I used to work in investor relations at a FTSE 100 company. We would have seen getting a free pass at the AGM on such a big issue as a shareholder communications win. We would be congratulating ourselves on dodging a bullet, and living to fight another day: to do business as usual.