Backers of a shareholder resolution at oil and gas major Shell have reiterated their call for greater transparency about the company’s liquefied natural gas (LNG) growth plan after the company’s capital markets day this week.
Earlier this year, a coalition of institutional investors, including Brunel Pension Partnership, Greater Manchester Pension Fund, and Merseyside Pension Fund, filed a shareholder resolution asking Shell to justify its LNG growth assumptions and clarify how these plans align with its climate goals.
This week, Shell reiterated its ambition to become the world’s leading integrated gas and LNG business, targeting sales growth of 4-5% per year until 2030.
Jackie Garton, corporate climate campaign manager at ShareAction, which is supporting the filing of the shareholder resolution, said: “It’s difficult to understand how Shell doubling down on its objectives of growing its liquefied natural gas sales is consistent with its stated climate commitments.
“The level of support for the shareholder resolution demonstrates that both institutional and individual investors need greater transparency from Shell.”
Nick Mazan, UK company strategy lead at the Australasian Centre for Corporate Responsibility, which is leading on the resolution alongside ShareAction, said: “Increasing LNG sales will make it harder for the company to reach its climate commitments, despite restating its commitment to more value with less emissions.”
Speaking ahead of Shell’s capital markets day earlier this week, Lindsey Stewart, director of investment stewardship research and policy at Morningstar Sustainalytics, said that Shell’s view that LNG will play an intrinsic part in the transition by helping eliminate more carbon-intensive fuels like coal was unsurprising.
“We’ll find out at the May annual general meeting what investors think of those opposing views, although it’s worth noting that when assessing recent AGM results, there has been little change in the proportion of Shell shareholders willing to challenge the company’s climate strategy recently, roughly 20% over the last three years,” said Stewart.
Asset manager support for shareholder resolutions aimed at tackling social and environmental issues hit a new low last year, driven by the voting behaviour of large US asset managers.
This AGM season will unfold amid what Catherine Howarth, chief executive officer of ShareAction, has deemed a “stewardship recession”.
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