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