Skip to main content
Open this photo in gallery:

A Shell logo is pictured during the European Business Aviation Convention & Exhibition (EBACE) in Geneva, Switzerland, May 23, 2022.DENIS BALIBOUSE/Reuters

Shell shareholders should vote against a climate activist resolution seeking faster emissions cuts, proxy advisory firm Institutional Shareholder Services (ISS) said on Saturday, while acknowledging the merits of the proposal.

Shell investors will vote at an annual general meeting on May 23 on a resolution filed by the Follow This activist shareholder group which asks the energy giant to align with the 2015 Paris climate deal.

Scientists say the world needs to cut greenhouse gas emissions by around 43 per cent by 2030, from 2019 levels, to have any hope of meeting the Paris Agreement goal of keeping global warming well below 2C above pre-industrial levels.

Shell aims to cut the intensity of planet-warming gases across its portfolio and the use of its products by 20 per cent by 2030 and 100 per cent by 2050. It has ruled out setting absolute emissions cuts targets, including the combustion of its products.

Measuring emissions by intensity means a company can technically increase its fossil fuel output and overall emissions while using offsets or adding renewable energy or biofuels to its product mix.

Shell has recommended its shareholders vote against the Follow This proposal.

ISS, whose recommendations steer many investors’ voting, said Follow This’s “argument that intensity metrics are not a substitute for absolute metrics is entirely valid” and is echoed by ISS analysis.

It said the merits of the activist resolution are “fully accepted” but if adopted it would “represent a change in strategy from the one that Shell has adopted” which is why ISS recommends a vote against it.

At Shell’s 2022 shareholder meeting, Follow This received 20 per cent of votes, down from 30 per cent the previous year.

In 2021, a Dutch court ruling, still in appeal, told Shell to reduce greenhouse gas emissions in absolute terms by 45 per cent by 2030 across the entire lifecycle of its hydrocarbons.

Your Globe

Build your personal news feed

Follow topics related to this article:

Check Following for new articles

Interact with The Globe