INVESTOR BRIEFING
Investors should vote according to the ISS analysis, not its voting recommendation
Did ISS make a typo in their voting recommendation AGAINST resolution 23 at the Shell AGM? It’s hard to believe they didn’t, because the proxy voting advisor makes such a compelling analysis to vote FOR the climate resolution filed by 27 investors and Follow This.
ISS arguments in favour
In the analysis provided by ISS, as seen by Follow This, the advisor only makes arguments for voting in favour, highlighting the urgency and necessity of action on climate change, as well as the merits of the resolution.
These include acknowledging the critical nature of action in the current decade, the imperative for emissions to peak by 2025 and reduce by 43% by 2030, and the recognition that the case of the Follow This climate resolution has grown stronger in light of Shell recently backtracking on emissions targets. Additionally, the acknowledgment that Paris-aligned 2030 Scope 3 targets are not part of Shell’s current strategy underscores the misalignment between the company’s targets and global climate imperatives.
Recommendation against appears illogical
Despite these compelling arguments in favour of supporting the resolution, the proxy advisor has recommended to vote against, which appears illogical. The advisor’s assertion of “uncertainty” regarding the resolution’s impact on the determination of Shell’s strategy lacks substantiation and fails to provide a coherent rationale for opposing the resolution.
Given the support of the resolution’s merits in its analysis, it is perplexing that the proxy advisor advises against adoption without adequately addressing the logical inconsistencies in their recommendation. Dismissing the resolution based on uncertainty about the impact on company strategy undermines the essence of shareholder engagement and shareholder resolutions. This line of reasoning implies that any proposal challenging the company’s approach (to climate) should be opposed.
Ultimately, the proxy advisor’s recommendation undermines the urgency of climate action and fails to align with its own overwhelming evidence supporting the resolution’s adoption.
High-level question
The Shell shareholder resolution (item 23) puts the high-level question to shareholders as to whether or not the company should align its medium-term targets with the goal of the Paris agreement. The metrics for proving Paris-alignment and strategy for achieving these targets remain completely under the control of management.
Given the analysis of ISS, your vote in favour of resolution is warranted.
