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Activist investor prepares to take on Shell over climate targets

CITYA.M. 

Activist investor prepares to take on Shell over climate targets

: THURSDAY 12 MAY 2022

Shell is preparing for a shareholder showdown at its upcoming general meeting later this month, with activist group Follow This pushing the energy giant to commit to more stringent environmental targets.

It has warned shareholders that Shell’s current transition plans are not aligned with the Paris Agreement, and has filed a motion – resolution 21 – calling for the oil and gas major to publish targets that cover short, medium and long term emissions in both its operations and the use of its energy products.

The group holds a less than one per cent stake in the energy giant, but City A.M. understands its position is backed by multiple Dutch institutional investors.

Follow This argues that there are strong business reasons for wanting to meet the goals of the Paris Agreement, the international treaty signed between nations in 2015 which pledges to limit temperature rises to below two degrees from pre-industrial levels.

McKenzie Ursch, legal counsel for Follow This, suggested Shell was acting like a lot of companies, seemingly wanting “to be left alone” after its commitment to net zero emissions by 2050 – and using the long-term pledge to put off immediate plans to meet climate targets.

He told City A.M.: “What we’re requesting is companies really start to take action now and set a meaningful target in the medium term. Without the necessary interim reductions, you keep postponing the need to take action, and if it gets to be 2040 and we’re still more or less emitting the same amount of greenhouse gas that we are now, it’s going to be cost prohibitive to get to net zero by 2050 in 30 years.”

The activist group has based its concerns on independent analysis from Global Climate Insights, which outlines that Shell’s current plans would see a four per cent increase in emissions by the end of the decade, and that two thirds of the company’s capex is not compatible with a two-degree limit on temperatures.

Shell has made record quarterly profits this year amid spiralling oil and gas prices, increasing its shareholder buyback to $8.5bn.

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