Follow This, the grassroots green investor group, has filed three shareholder proposals at Shell, BP and Equinor labelled “climate action” resolutions; and two at Exxon and Chevron under the banner of “climate strategy”.
The move follows the announcement by Spanish oil major Repsol of its plans to achieve net zero emissions by 2050 through emissions targets – and impair assets accordingly to the tune of €4.8bn.
The founder of Follow This, Mark van Baal, told Responsible Investor:
“Shell could claim for some years that they have an industry leading ambition but Repsol is now the only oil major with Paris-aligned targets. We have to see if this will result in Paris-aligned investments but Repsol has now set the example.”
“There is so much debate and confusion among investors about what Paris alignment actually means” – Mark van Baal
Follow This has filed the same resolution at Shell, BP and Equinor. As in previous years, it asks them to align business strategy with the goals of the Paris Agreement.
That includes Scope 3 emissions and refers to the Intergovernmental Panel on Climate Change’s scenarios under which absolute net energy-related emissions should be reduced by 70% to 100% by 2050.
The resolution translates those absolute emission targets into net carbon intensity or relative targets. See discussion on this topic here.
The resolution filed at Exxon and Chevron has been drafted differently: not asking specifically for targets but Paris-aligned strategies, in an attempt to pass the ‘no-action’ process with the Securities and Exchange Commission (SEC), whereby companies seek to get shareholder proposals omitted.
In April this year six of the top 10 Dutch institutional investors that have supported Follow This’s resolutions at Shell, stated:
“We expect Shell to bring its long term 2050 NCF [net carbon footprint] ambition in line with the (well) below 2°C pathway of the IPCC. We consider the company’s 2020 AGM as a good moment for Shell to demonstrate this.”
They are NN Investment Partners, PME and PMT (MN), ACTIAM, Aegon, Kempen Capital Management and Achmea.
Van Baal said: “Nothing has changed since 2018. Shell still hasn’t had an adequate ambition. It’s not a target and by far not aligned with Paris. We need clear-cut resolutions. There is so much debate and confusion among investors about what Paris alignment actually means.”
There is overlap between Follow This and the Climate Action 100+ investor initiative when it comes to these five oil majors.
Asked whether there is a collaboration between the two, van Baal said: “We always offer cooperation but it’s been declined so far. We have the same end goal but a different theory of change.”
Van Baal explained: “I don’t think change will come from a proposal supported by the 99% [of shareholders]. With Shell we have shown that change can happen thanks to the support of a few progressive investors.”
Asked about whether CA100+ would file shareholder proposals at the five oil majors, a spokesperson told RI:
“Joint statements on agreements reached with companies or escalation in the form of shareholder resolutions from investors happen as appropriate on a case by case basis. Announcements on any individual company will therefore be forthcoming as and when relevant.”
Asked whether there is a collaboration between them and other players beyond CA100+ who in the past have also filed or engaged with those companies, such as Follow This, the spokesperson said:
“We consult with a wide network of groups on thematic or company specific issues across the initiative. Where appropriate this includes liaison on shareholder resolutions or broader engagement.”