MN, the asset manager of €84.5bn metals processing industry fund PMT, will vote in favour of the climate resolution filed by the activist shareholder group Follow This, alongside 27 institutional investors, for Shell’s next annual general meeting (AGM).
In the resolution, Follow This urges Shell to align its medium-term emissions reduction targets covering the greenhouse gas emissions of the use of its energy products (Scope 3) with the Paris Agreement.
MN will also vote against the remuneration proposal of Shell’s board, after Shell rejected the resolution last week, and against the firm’s energy transition strategy. Shell recently weakened its carbon reduction goal for 2030 to 15-20% and scrapped its separate 45% reduction target for 2035.
MN, which invests around €200m in Shell shares and bonds, noted in its supporting statement to the resolution that Shell’s current CO2 reduction targets are not aligned with the Paris Agreement.
“No third-party source indicates that Shell’s medium-term targets are aligned with a 1.5°C warming scenario. Moreover, the company does not sufficiently demonstrate how it will reach these targets, which means it is unclear how the underlying approach contributes to significant reductions in global emissions this decade,” according to MN.
The Dutch pension asset manager is especially disappointed with Shell’s push for a 20-30% growth of liquefied natural gas (LNG) production, as it believes this will offset future reductions in emissions emanating from the company’s oil products.
“We share the company’s new ambition to lower Scope 3 emissions from the oil products the company sells with 15-20% by 2030. But we do not believe this level of fossil LNG growth aligns with pathways to the Paris Climate Agreement,” MN explained.
LNG is often touted as a transition fuel and a cleaner alternative to coal, but has more than two times the carbon intensity of natural gas that is transported through pipes.
Climate Action 100+
MN is the lead investor for the oil and gas industry at investor engagement collective Climate Action 100+. As such, it would be “logical” for other Climate Action 100+ members to also vote in favour of the Follow This resolution, according to the shareholder group’s director Mark van Baal.
“If asset managers want large emitters to reduce their carbon footprint, they should follow their lead investor,” noted Van Baal, who added that the organisation’s more ambitious ‘Phase two’ approach that focuses on concrete action towards decarbonisation should also result in more votes in favour.
Shell’s AGM, where the Follow This resolution will be brought to a vote, will take place on 21 May in London.
Looking for IPE’s latest magazine? Read the digital edition here
No comments yet