Angry Shell AGM sees support for climate votes stall

Shareholder votes at Shell's annual general meeting in London today, 24 May, provided further evidence that investor momentum in support of stronger climate policies at oil and gas companies has stalled in the wake of the Ukraine-Russia war.

After a tempestuous meeting, which saw the start of proceedings disrupted by protesters, Shell said support for the activist investor-led Resolution 21 — which calls for the company to set short-, medium- and long-term targets consistent with the Paris climate agreement that cover Scope 1, 2 and 3 emissions — declined to 20.3pc of votes cast, from around 30pc last year. Even support for Shell's in-house vote on its energy transition progress — Resolution 20 — fell to less than 80pc from around 89pc in 2021.

The decline in support for Resolution 21 followed a similar fall in investor backing for Paris-aligned goals at BP two weeks ago.

During today's meeting, Shell chief executive Ben van Beurden gave a robust defence of the company's strategy for navigating the energy transition. Mark van Baal, founder of the Follow This group that proposed Resolution 21, argued from the floor of the meeting that Shell has not reinvented itself in the seven years since the Paris agreement on climate change.

"Emissions have not been down dramatically and, more important, 90pc or more of [Shell's] investments still go to fossil fuels and not to renewables," he said. "And, in this decade… Shell has no plans to substantially shift investments to decrease emissions."

In response, van Beurden argued Shell believed its strategy and targets are consistent with the Paris Agreement. He said Follow This is being unreasonable by asking Shell to go further than society, as a whole, in cutting emissions.

"What you are asking for, which is a 40pc reduction [in emissions by 2030], is two times Paris," van Beurden said, explaining the energy sectors that Shell serves require about a 20pc reduction to be Paris-consistent. Later in the question-and-answer session he said: "We don't have coal-fired power stations that we can switch off."

Van Beurden also noted Shell's investment levels in the oil sector had come down considerably and are now in line with the IEA's net-zero emissions scenarios.

"We used to invest more than $13bn a year in oil," he said. "We now do less than $8bn. And the IEA assessed as a world [that] we should go from $700bn a year to $500bn a year. The IEA never said zero."

After the meeting, van Baal issued a statement reiterating Follow This' view that Shell's strategy is yet to lead to significant emissions reductions this decade.

"Unfortunately, investor sentiment has shifted, likely as a result of the energy crisis and windfall profits brought on by the war in Ukraine," he said.

Earlier in the day, climate protesters disrupted the meeting so it did not get going in earnest until after noon — more than two hours after its official start time of 10:00 BST (09:00 GMT). Shareholders were ushered out of the room so the protesters, who had glued themselves to their seats, could be removed before the resumption of the AGM.

By Jon Mainwaring