INVESTOR BRIEFING
As CA100+ enters Phase 2, signatories should support leads to achieve increased expectations
We hope you are well. If you are a signatory of the CA100+ and a shareholder in Shell, we would like to share some relevant information with you to take into account when taking your voting decisions for the upcoming AGM.
MN, your CA100+ lead investor at Shell, has pre-declared its vote in favour of the Follow This climate resolution (Resolution 23), co-filed by 27 investors. The Dutch investor, with € 140 billion assets under management, states: “We do not believe this level of fossil LNG growth [20-30% by 2030] aligns with pathways to the Paris Climate Agreement.” (full statement below or on the PRI website)
The pre-declaration is highly significant since MN leads engagement with Shell on behalf of the Climate Action 100+, the multi-trillion investor alliance urging the world’s largest emitters to cut CO2-emissions.
Increased action in Phase 2
The CA100+ announced Phase 2 in June 2023, which stipulates increased action on climate change from signatories and lead investors. The pre-declaration of the Shell-lead MN is congruent with this strategy, and signatories are expected to compliment the move with increased voting support.
Phase 2 indicates lead investors should produce an annual overview of their engagement and escalation with CA100+ target companies, as well as disclosing voting and rationales for CA100+ flagged votes. With their pre-declaration, MN is taking further steps to hold the company to account and align Shell’s medium-term emissions reduction targets with the Paris Agreement.
“With this pre-declaration, MN is basically urging all CA100+ members to vote for the resolution as well in order to give their lead engager greater leverage at Shell,” said Mark van Baal of Follow This, the shareholder group that filed the climate resolution with 27 investors. “A vote against resolution 23 would undermine the CA100+ lead’s engagement options, and enable Shell to backtrack further on emissions targets.“
After the votes remained stagnant at 20% for two years, Shell backtracked on climate targets last month, demonstrating that one fifth of the votes is not enough to compel the board to align the company with Paris.
Pre-declaration against remuneration and Energy Transition Strategy
In addition to the pre-declaration for the Follow This climate resolution, MN has announced to vote against Shell’s board remuneration (resolution 2) on behalf of Dutch pension fund PMT. Citing a lack of “intermediate targets between 2030 and 2050,” the CA100+ lead investor will also vote against Shell’s Energy Transition Strategy (resolution 22).
Litmus test
The pre-declaration creates a litmus test for the credibility of Phase 2 of the CA100+ alliance. Will members cast their votes in line with their lead investor, or will would they rather side with the board of Shell?
We thank MN for their determination to achieve the Paris goals, as well as their recognition that engagement and voting are not mutually exclusive (as oil companies frequently claim), but rather strengthen each other.
We trust many investors will follow and thus strengthen the alliance goal to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
Should you have any questions, or a wish to pre-declare your vote, please do not hesitate to contact us.
Full text of MN’s statement
“We will vote FOR this advisory resolution, the responsibility for determining the strategy lies with the executive committee and the board of the company. The advisory resolution filed by 27 shareholders, supports our goal to align our portfolio with the Paris Climate Agreement. We share the company’s new ambition to lower scope 3 emissions from the oil products the company sells with 15-20% by 2030. However, the scope 3 reductions will be offset by growth in fossil LNG production of 20-30% by 2030. We do not believe this level of fossil LNG growth aligns with pathways to the Paris Climate Agreement.”
MN on the PRI platform: Adopt Scope 3 GHG Targets (1.5C Aligned) at Shell PLC | PRI (unpri.org)
PMT (MN is the asset manager of PMT): pmt-stemtabel-2024.pdf
In Dutch: Stemmen op aandeelhoudersvergaderingen – PMT
Climate Action 100+ is an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change. Over 700 investors are engaging companies on improving climate change governance, cutting emissions and strengthening climate-related financial disclosures, in order to create long-term shareholder value.
The Shell AGM will be held in London on May 21. The climate resolution supports Shell to align its medium-term Scope 3 emissions reduction targets with the Paris Climate Agreement.
Follow This Climate Resolution
Shareholders support the Company, by an advisory vote, to align its medium-term emissions reduction targets covering the greenhouse gas (GHG) emissions of the use of its energy products (Scope 3) 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.
The strategy for achieving these targets is entirely up to the board.
You have our support.
