For the first time, ISS advises shareholder to vote FOR Follow This climate targets resolutions (at Equinor and Shell)

MEDIA BRIEFING 

  • At Shell, ISS’s sustainable advice if FOR, ISS’s standard advice is AGAINST

  • At Equinor, both ISS’s sustainable and standard advices are FOR

  • Shell will answer (or avoid) three crucial questions during its pre-AGM-Q&A-session today (13 May, 12:00 BST)

  • Follow This: a vote for climate targets will never be ‘unnecessary’

As investors and Shell debate whether a vote for climate targets is ‘unnecessary’ (as Shell insists), ISS, one of the world’s two largest proxy advisors, advises shareholder to vote for the Follow This climate resolution at Shell (AGM 19 May) in its sustainability advice, and against in its standard advice (texts below).

Questions during Shell’s pre-AGM-Q&A-session

Shell’s answers during its pre-AGM-Q&A-session today (13 May, 12:00 BST, 13:00 CET) could play a role in the decision-making process of investors. They have to cast their votes before Friday close of business.

These are our questions for Shell’s pre-AGM-Q&A-session (full texts below):

Will your new ambition lead to an absolute emissions reduction within this decade (by 2030)?
Will your new ambition lead to a fundamental shift in investments away from fossil fuels to renewables of annually at least 50% of your investments by 2030?
When the board rejects medium- and long-term targets in favour of maintaining the flexibility “to thrive in whatever world society moves towards” (Shell, 2018), does this include a scenario in which the world fails to meet the Paris goal to limit global warming to well below 2°C?

For our view why climate targets are never ‘unnecessary’, see our view on the Responsible Investor (free article)

At Equinor, both ISS’ sustainable and standard advices for the Follow This climate resolution are FOR

For Equinor (AGM 14 May) the generic advice is in favour of the Follow This Climate resolution. Interestingly enough, the advice is the exact same as the sustainable advice at Shell: “targets would aid shareholders in understanding the company’s […] alignment with greenhouse gas reductions necessary to achieve the Paris Agreement goal.” (text below).

ISS ‘Sustainability Advisory Services’ Policy Voting Recommendations’ at Shell:

Item 21. Request Shell to Set and Publish Targets for Greenhouse Gas (GHG) Emissions

FOR

VOTE RECOMMENDATION

A vote FOR this proposal is warranted as the setting and publication of targets would aid shareholders in understanding the company’s assessment of how it could reduce its carbon footprint in alignment with greenhouse gas reductions necessary to achieve the Paris Agreement goal of maintaining global warming well below 2 degrees Celsius.

ISS Standard Vote Recommendation at Shell:

AGAINST – Shell has recently announced an ambition to become a net-zero emissions energy business by 2050 (covering Scopes 1, 2 and 3) and a strengthened Net Carbon Footprint reduction target of 65% by 2050, with an interim target of 30% by 2035. This is a significant step forward which helps shareholders understand how the Company is working to align itself with the Paris Climate Agreement. Although shareholders may benefit from some additional disclosures from Shell to further support and substantiate its stated ambitions, the Company’s climate strategy is considered at this time to be a sufficient and appropriate response to the matters raised in the resolution. The Company’s progress will continue to be kept under review.

ISS Standard Vote Recommendation at Equinor:

Item 9. Instruct Company to Set and Publish Targets Aligned with the Goal of the Paris Climate Agreement to Limit Global Warming

FOR

VOTE RECOMMENDATION

A vote FOR this proposal is warranted as the setting and publication of targets would aid shareholders in understanding the company’s assessment of how it could reduce its carbon footprint in alignment with greenhouse gas reductions necessary to achieve the Paris Agreement goal of maintaining global warming well below 2 degrees Celsius.

Full text questions Follow This to Shell:

Will your (net) relative emissions reduction ambitions (Net Carbon Footprint ambitions) lead to a (net) absolute emissions reduction (for your total yearly Scope 1, 2, and 3 emissions) within this decade (by 2030)?

Will your new ambition (April 16, 2020) lead to a fundamental shift in investments away from fossil fuels to renewables of annually at least 50% of your investments within this decade (by 2030)?

When the board rejects medium- and long-term targets in favour of maintaining the flexibility “to thrive in whatever world society moves towards” (Shell, 2018), does this include a scenario in which the world fails to meet the Paris goal to limit global warming to well below 2°C

Previous

Next

Share This