Shell weakens climate targets and prioritizes fossil fuels, defying shareholder pressure and legal demands for urgent emission reductions.
Shell scrapped its 2035 emissions target. Even worse, the company still pumps 92% of its capital into fossil fuels. This strategy bets directly against the Paris Agreement.
We spent a decade rallying shareholders, peaking at 30% support for our climate action in 2021. Institutional investors have the power to drive Shell and other oil giants towards a clean energy transition.
You cannot claim to support the energy transition while backing a board that actively fights it. Investors must force a sustainable shift before climate risks become unavoidable financial losses.
Shell is betting fully on fossil fuels. Despite growing pressure from shareholders, the oil company continues to cling to a strategy that is at odds with the Paris Climate Agreement. In 2024, Shell even weakened its climate goals. At the same time, 19% of shareholders voted for a climate resolution – against the board’s advice.
The core of the problem lies with Scope 3 emissions. These are the greenhouse gases released when customers use Shell’s products – gasoline in cars, gas in stoves. These emissions constitute 80% to 95% of an oil company’s total CO₂ emissions. Shell focuses primarily on the small 5 to 20 percent and systematically avoids responsibility for the rest.
Activist shareholder Follow This has been hammering on this for years. The organization, founded in 2015, submits climate resolutions to Shell’s shareholder meetings every year. The message: set goals that truly align with the Paris Climate Agreement. Shell needs to shift its “brains and billions” to renewable energy.
The argument is not only moral, but also financial. Climate risk translates directly into financial risk. According to Carbon Tracker, two-thirds of existing fossil fuel reserves must remain in the ground to tackle the climate crisis. That means: stranded assets and potential losses for shareholders.
The numbers show a clear trend. In 2016, only 2.7% of shareholders voted for the climate resolution. Shell rejected the proposal as “unwise”. A year later, in 2017, the resolution received 6.3% support. The board called it “unreasonable” and even “harmful” to the company at the time. The problem according to Shell? The resolution demanded responsibility for Scope 3 emissions.
That modest 6% proved influential. At the end of 2017, Shell became the first oil and gas company worldwide with a climate ambition: halving CO₂ emissions by 2050, including Scope 3 emissions. CEO Ben van Beurden admitted that the resolution contained a “kernel of truth”.
In 2019, Shell went a step further. The company linked short-term climate goals to executive salaries. A groundbreaking step that garnered praise from investors and activists.
The shareholder support continued to rise. In 2018, the resolution reached 5.5%, in 2020 it jumped to 14.4%. The peak came in 2021: 30% voted in favor. This was a “shareholder revolution” – nearly a third turned against management’s advice.
Support stabilized around 20% in both 2022 and 2023, and dropped to 19% in 2024. Follow This views this stabilization as insufficient to force fundamental change. The board only reacts to growing votes, not stable pressure.
That 19% might sound modest, but the pressure is increasing. In 2024, 27 institutional investors jointly filed the climate resolution. These investors collectively manage €4 trillion in assets. These are not small players, but influential European and American financial giants. Shell cannot ignore this voice.
Shell seems to be going in the opposite direction. In 2024, the company drastically lowered its climate goals. The 2030 goal for net CO₂ intensity went from 20% to 15-20%. The 2035 goal – previously set at a 45% reduction – Shell scrapped completely.
Mark van Baal, founder of Follow This, reacts sharply: “Shell is betting on the failure of the Paris Climate Agreement.”
The strategy speaks volumes. Shell wants to grow its liquefied natural gas (LNG) production by 20% to 30% and keep oil production stable until 2030. Of total investments, 92% goes to fossil fuels. Only 8% is for clean energy. Even worse: that 8% has recently declined.
According to its own documents submitted to the court, the company expects its total Scope 3 emissions to remain “more or less stable” until 2030. The growth in LNG sales compensates for the decline in oil products. Stable might sound neutral, but the Paris Climate Agreement requires “immediate, rapid, large-scale reductions” of approximately 40% to 45% by 2030.
Shell consistently dismisses external warnings. The International Energy Agency (IEA) predicts that demand for oil and gas will fall after 2029. The IEA states that all new oil and gas exploration must stop immediately to limit warming to 1.5°C.
Shell’s board calls this “just one worldview” and prefers to rely on its own scenarios. This lack of imagination draws criticism. Critics speak of a “lack of imagination beyond oil and gas.” This reliance on internal projections significantly increases the risk of stranded assets and climate liability for shareholders.
Climate Action 100+, a major investor network, concluded that no major oil company – including Shell – is on track for the 1.5°C goal. The key indicators are missing: medium-term goals and capital expenditures aligned with Paris.
Management’s arguments have evolved over the years. Where resolutions were first “unwise” or “unreasonable”, Shell now calls them “more harmful than helpful” and “against shareholders’ interests”. In 2024, CEO Wael Sawan said the resolution is “bad” for customers, the energy transition, and the company itself.
Follow This considers this consistent rejection as “hard and formal proof” that Shell refuses to incorporate Paris goals into policy. That conclusion gained legal weight when environmental organization Milieudefensie used Shell’s systematic rejection of climate resolutions as evidence in the lawsuit.
In 2021, a Dutch judge ruled that Shell must reduce its absolute CO₂ emissions by 45% by 2030 compared to 2019. A historic ruling.
However, Shell mainly uses intensity goals: emissions per unit of energy. Critics argue that this allows for growth in total emissions if production rises. Research by Global Climate Insights from 2021 projected that Shell’s net absolute emissions will grow by 4% by 2030 – a direct collision with the Climate Agreement.
Large institutional investors are drawing consequences. ABP, the largest pension fund in the Netherlands, announced in 2021 that it would stop investing in fossil fuel producers. The climate crisis was the reason.
Follow This uses purely financial arguments to convince large investors. Climate risk is long-term financial risk. It threatens assets and pension stability. For many pension funds and asset managers, this weighs heavily.
The shareholder movement is also facing headwinds. In 2024, ExxonMobil filed a lawsuit against Follow This to block climate resolutions. Legal experts call this a Strategic Lawsuit Against Public Participation (SLAPP) – an intimidation attempt to silence critical voices.
Follow This, a small organization with only seven employees and a support dog, stands face to face with a giant multinational. The balance of power is extremely skewed. To prevent a costly precedent that could block future resolutions across the entire sector, Follow This strategically withdrew its proposal.
Due to this legal pressure and the current pro-fossil political and legal climate, Follow This decided to strategically pause new climate resolutions in 2025. The focus is now on mobilizing more investors and defending shareholder democracy against attacks from Big Oil.
Shell’s shareholder meeting is in three months. Shareholders can submit resolutions until March 15. Mark van Baal is clear: “The decision to save the Paris Climate Agreement ultimately lies with investors.” They hold the key to forcing Big Oil to change.
The numbers speak: two-thirds of existing fossil fuel reserves must remain in the ground to tackle the climate crisis. Shell’s strategy goes directly against that. Former CEO Ben van Beurden identified the biggest challenge of his career: the reluctant public that does not see Shell as a force for good.
The question now is: will shareholder support increase to the level Shell can no longer ignore? Or will the company continue to cling to fossil fuels, knowing that – as Follow This argues – the fossil fuel industry must quickly take steps toward sustainability. They have the knowledge and capital for the transition to renewable energy.
