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May 24, 2023

Shell shareholders vote against Paris Climate Agreement resolution

Protestors invade AGM, chanting ‘go to hell, Shell’

Shareholders at Shell have voted against aligning the energy company’s ESG goals with the Paris Climate Agreement, despite persistence from activists and protesters.

At the AGM, held yesterday in London, shareholders voted against resolution 26, which would have seen the energy giant reduce its Scope 3 emissions to align with the Paris climate goals. The vote received 79 percent majority against the resolution, roughly the same as last year, while Shell’s own energy plan was passed with 80 percent of shareholders on board.

Wael Sawan, CEO at Shell, said he was pleased most investors remain supportive of ‘our strategy to become a net-zero emissions energy business by 2050. We are focused on performance and discipline to achieve the levels of returns our shareholders expect across all our business areas, and to ensure the company is valued fairly.

‘The level of votes on resolutions 25 and 26 requires us to explain what actions we intend to take to consult shareholders in order to understand the reasons behind the result, and report back within six months.’

Shell shareholders vote against Paris Climate Agreement resolution
Wael Sawan, Shell

The board of Shell had previously asked investors to vote against the climate resolution, stating that it would ‘effectively mean handing over retail and commercial customers to competitors’.

It said resolution 26 would ‘materially affect’ Shell’s financial strength and limit its ability to generate value for shareholders. ‘Adopting the shareholder proposal would therefore be against shareholders’ financial interests and would not help to mitigate global warming,’ it explained.

‘Shut down Shell’

During the AGM, protestors from climate activist group Fossil Free London interrupted the meeting and began chanting ‘go to hell, Shell’ to the tune of Hit the Road, Jack by Percy Mayfield. The protestors tried to reach the stage to speak to the board but were prevented by security, while people shouted ‘shut down Shell’ in the background.

Shell shareholders vote against Paris Climate Agreement resolution

Fossil Free London had supported fellow activist group Follow This and its campaign to limit global warming to below 2°C and to pursue efforts to limit the temperature increase to 1.5°C. Following the decision at yesterday’s AGM, however, Mark van Baal, founder of Follow This, said: ‘We have made it easy for investors to use the power of their votes, but many investors have yet to decouple short-term profits from long-term risks for the company and their portfolios.

‘Thankfully, prominent investors have voted in favor of our climate resolution; we thank them for their determination to achieve Paris. We hope other investors will follow their leadership.’

All-time-high profits

In March, Shell’s profits for 2022 hit an all-time high, reaching $39 bn. Profits were predominantly sparked by high energy bills that swept across the UK as a ripple effect from Russia’s invasion of Ukraine.

Sawan said at the time: ‘Profit without sustainability erodes our license to operate. Sustainability without profit erodes our shareholder support and financial capacity to play a meaningful part in the energy transition.

‘We must continue to provide energy and do it with fewer emissions. We can only do this with the backing of our shareholders because it is their capital that enables us to invest in the energy transition.’