Shell board tells shareholders to vote against their own right to information
PRESS RELEASE
Shell reported a surge in first-quarter profits, due to elevated oil prices driven by the war in Iran. The quarterly dividend increases to $0.3906 but remains well below pre-Covid level of $0.47 per share.
“These windfall profits are the result of war, not strategy. The underlying business model remains untenable as fossil fuel demand will enter structural decline soon,” says Mark van Baal, CEO of Follow This. The International Energy Agency (IEA) projects a decline in oil and gas demand after 2029.
“If Shell can’t restore its dividend to pre-Covid level with the oil price above $100, how will the company create shareholder value when demand declines and the oil price drops?” asks Van Baal. In 2020, when oil demand fell by 9%, Shell cut its dividend by 66% – the first cut since World War II.
The Follow This resolution, co-filed with 21 institutional investors, calls on Shell to publish how it plans to create shareholder value under declining demand scenarios. It is basic disclosure – the kind that shareholders of any company facing a structural market shift have the right to require.
The Shell board has urged shareholders to vote against the resolution, arguing the request is ‘already comprehensively covered’ – a claim that the resolution’s supporting statement directly rebuts.
“Shell is in denial. The board continues to invest in oil and gas and has no plan to diversify beyond fossil fuels. As oil demand declines, a company that fails to diversify faces managed decline. If you are in a hole, stop digging,” Van Baal adds.
Co-filing investors share that concern. Councillor Andrew Thornton, Chair of West Yorkshire Pension Fund, said: “Fossil fuel demand will likely peak before the end of the decade. The UK oil majors must have credible and robust business plans in place to deal with this energy transition.”
“The board has made its position clear. At the AGM on May 19, shareholders will make theirs,” Van Baal concludes.
About the resolution
Follow This and a group of 21 institutional investors representing €1.2 trillion in assets have filed resolutions at Shell calling on the company to disclose how it plans to create shareholder value as oil and gas demand declines.
The resolution is also co-filed by current and former Shell employees, who say the board should be transparent about the company’s long-term viability.
Follow This is backed by over 4,000 members and institutional investors worldwide.
The announcement of the resolution, including quotes from investors, is available here.
