On Saturday, proxy consulting company Institutional Shareholder Services (ISS) advised Shell (SHEL.L) shareholders to vote against a climate activist resolution seeking speedier carbon reduction while noting its benefits.
The Follow This activist shareholder group will encourage Shell investors to support the 2015 Paris climate pact at their annual general meeting on May 23.
To fulfill the Paris Agreement’s objective of keeping global warming at 2C above pre-industrial levels, scientists predict greenhouse gas emissions must decrease by 43% by 2030 from 2019.
Shell plans to eliminate planet-warming emissions by 20% by 2030 and 100% by 2050 throughout its portfolio and products. It has rejected absolute emissions-cutting objectives, including product combustion.
Measuring emissions by intensity allows a corporation to boost fossil fuel output and emissions while employing offsets or adding renewable energy or biofuels to its product mix.
Shell recommends shareholders vote against Follow This.
ISS, whose recommendations influence many investors’ votes, stated Follow This’ “argument that intensity metrics are not a substitute for absolute metrics is entirely valid” and repeated ISS findings.
The activist resolution’s merits are “fully accepted,” but it would “represent a change in strategy from the one that Shell has adopted,” hence ISS recommends voting against it.
Follow This won 20% of Shell’s 2022 shareholder votes, down from 30% the year before.
A 2021 Dutch court judgment, presently under review, ordered Shell to cut greenhouse gas emissions by 45% across its hydrocarbon lifecycle by 2030.
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