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Shell to recommend shareholders support ‘Aiming for A’ climate resolution at AGM

Oil giant looks forward to implementing shareholders’ request

(Updates with BP comments)

Oil giant Royal Dutch Shell will recommend that its investors support the ‘Aiming for A’ resolution filed by a group of international investors seeking greater disclosure around climate change.

The Anglo-Dutch group says it looks forward to implementing it if it is passed at its forthcoming annual general meeting (AGM).

The proposal, on ‘strategic resilience for 2035 and beyond’ has been spearheaded by charity investment specialist CCLA and has the support of a range of leading global investment institutions. Co-filers include members of the Local Authority Pension Fund Forum (LAPFF), UK and US church investors and leading international investors such as Folksam, Christian Brothers Investment Services, Ilmarinen, Local Government Super, the Vermont Pension Investment 
Committee and three of the Swedish state AP funds. A similar motion has also been filed with peer firm BP (link).

CCLA’s Head of Ethical & Responsible Investment, Helen Wildsmith, told RI: “Shell’s response indicates that supportive but stretching shareholder resolutions can play a positive stewardship role.”

The action has, in part, been coordinated by campaign group ShareAction and ClientEarth, the law firm that has the backing of rockers Coldplay and Brian Eno, and philanthropist and politician Zac Goldsmith.‘Aiming for A’ refers to the investors’ push to get companies in the top bracket of an assessment by the CDP [Carbon Disclosure Project].

“The Board has given consideration to the resolution and has decided to recommend that shareholders support the resolution at the AGM,” Shell said in a letter to shareholders today (January 29). It said it would provide additional reporting in 2015, in advance of full reporting in response to the resolution in 2016.

This will cover ongoing operational emissions management, asset portfolio resilience to post-2035 scenarios, low carbon energy R&D and investment strategies, strategic KPIs (key performance indicators) as well as executive incentives and public policy interventions.

“We maintain our commitment to engage with our shareholders in this area and look forward to implementing the resolution should it be passed at the AGM,” the letter, signed by Executive Vice President for Investor Relations JJ Traynor, adds.

The letter comes on the day the company revealed plans to cut spending by over $15bn as revenues slide amid lower oil prices. But CEO Ben van Beurden said the company was taking a “prudent approach” and that it “must be careful not to overreact to the recent fall in oil prices”.

Separately, a BP spokesman said the company continues to have “constructive discussions” with CCLA and other shareholders and that it would “respond appropriately” ahead of its AGM.

See RI’s recent Editorial Comment on the resolution here.