Royal Dutch Shell AGM: Our climate-related votes

To secure a sustainable future, we must achieve net zero global greenhouse gas emissions by 2050, and a 50% cut in emissions between now and 2030. Investors have an important role to play, by driving climate action at the companies we invest in through engagement and voting. Discover how we voted at Royal Dutch Shell’s annual general meeting (AGM) today.

Item 20: Shell’s Energy Transition Resolution

Royal Dutch Shell is voluntarily submitting its Energy Transition Strategy for an advisory vote at the AGM. As such, Shell is the first company in the oil & gas sector to allow shareholders a vote on a strategy that explains how the company intends to transition in line with the Paris Agreement. The resolution asks shareholders to approve its Powering Progress strategy to accelerate the transition of its business to net-zero emissions, including targets to reduce the carbon intensity of energy products it sells:

BY 2023*
BY 2030
BY 2035
BY 2050

Our vote: AGAINST

We welcome Shell’s leadership in setting a net zero target for 2050 covering its complete value chain, as well as formally asking shareholder advice on its transition plan. In recent years, Shell has consistently improved integration of climate change into its strategy and governance. Shell was one of the first companies to include emissions related to the use of its products in its strategy and emission reduction ambition, to translate the long-term ambition into medium- and short-term targets and include those targets in executive remuneration.
We recognise Shell’s leadership in the energy sector and welcome the commitment to an annual say-on-climate vote at the AGM. However, the main driver of our voting decision is the plan itself: are we confident that Shell will transition fast enough to achieve net zero emissions by 2050? While we acknowledge the direction of Shell’s transition is towards net zero emissions by 2050 for the complete value chain, the trajectory (interim targets), as well as the instruments used to achieve the required reductions, do not provide sufficient certainty about alignment of the strategy with the ultimate goal of the Paris agreement to limit global temperature rise to well below 2°C. Our main concern about the plan is the fact that a large majority of decarbonisation is planned to take place after 2030, but the plan provides very limited indicators that the required acceleration of decarbonisation will take place. Shell confirms that after 2030 there is significant uncertainty about how society will transition to net-zero emissions.

In addition, Shell’s plan has a strong focus on natural carbon sinks and carbon capture and storage (CCS). We would prefer more focus on CO2 emission reductions resulting from the transition toward clean energy, which would reduce dependence from emission reductions by customers and reduce exposure to competition for credible carbon sink projects from many hard-to-decarbonise-sectors like cement.

Item 21: Shareholder proposal Follow This

In order to signal our reason for voting against Shell’s energy transition plan, we decided to support the shareholder proposal that asks the company to set and publish targets that are consistent with the goal of the Paris Climate Agreement: to limit global warming to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C.

ESG engagement in 2020

In 2020, we engaged with 31 companies, representing 87% of our Responsible Global Emerging Markets portfolio by value, with the aim of improving their management of material ESG issues.

Our vote: FOR

Interested in learning more about our climate-related voting activity? Discover how we voted for climate action throughout 2020.


Share on facebook
Share on twitter
Share on linkedin
Share on email

Risk disclaimer

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.
The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Use our handy glossary to look up any technical terms you are unfamiliar with.

Related Articles

Emerging Markets
Aerial view of the power plant chimneys
8 min read
October 2021

China’s carbon neutral ambitions: How it can deliver

What steps can China take to go carbon neutral by 2060, and what does it mean for our portfolio?
Responsible Investment
The vet picks up medicine in a syringe for cows
4 min read
October 2021

ESG Viewpoint: Public health: Antimicrobial resistance (AMR) and the animal health industry

Discover what steps we believe companies can take to counter the threat of AMR.
Responsible Investment
Glacier against the backdrop of snow-capped mountains
12 min read
October 2021

Good COP or bad COP?: What to look out for from the COP26 Climate Conference

World leaders will be gathering in Glasgow for the COP26 climate negotiations. After a year which has seen yet more record-breaking temperatures and severe weather events, the urgency of taking action is clearer than ever.