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Some institutional investors starting to reject Follow This climate change resolution at Shell

Advance voting disclosures reveal lack of support for proposal from campaign group

Leading institutional investors are voting against the climate change resolution at Royal Dutch Shell that was filed by campaign group Follow This, according to advance voting disclosures.

The resolution calls on the oil major to set goals that are compatible with the Paris Climate Accord to limit the warming of the earth to a maximum of 2 degrees Celsius – but the Anglo-Dutch giant has advised its shareholders to vote against it at its AGM on May 31.

It argues the proposal is “unreasonable” and shows a “basic misunderstanding” of the solutions necessary to meet the Paris goals.

Among leading pension funds that have already disclosed their voting at the Shell AGM are the Ontario Teachers Pension Plan (OTPP), CalPERS, the Canadian Pension Plan Investment Board (CPPIB), CalSTRS and the Florida State Board of Administration. They have all disclosed they are voting against the Follow This motion, according to their websites.The OTPP said: “We believe that the company’s current policies are sufficient, and therefore do not support this proposal.”

RI understands that European proxy partnership ECGS is advising its clients to back the resolution, despite misgivings about a lack of detail in the resolution. ECGS reckons Shell has enough resources and “balance sheet capacity” to increase its investment in renewable energy.

The proponents of the motion, in an article for RI, said it’s “good for Shell’s future, good for its shareholders, and good for the world”. And some investors have already come out in support of the resolution, including ACTIAM, Blue Sky Group and Ecofi Investissements.

But the company says it is “not in the best interests of the company and its shareholders as a whole” and that its directors unanimously recommend voting against it.

It’s a contrast to the ‘Aiming for A’ climate disclosure proposal in 2015 that the company backed and which went on to get almost total shareholder support.