THE HAGUE (Reuters) | Top investors in Royal Dutch Shell (RDSa.L) on Tuesday put pressure on the oil and gas giant to commit to hard targets to reduce greenhouse gas emissions to battle climate change.
Shell has set out “ambitions” to halve carbon emissions by 2050 and expand in renewables, goals Chief Executive Officer Ben van Beurden said were ground breaking for the oil industry.
But he clashed with shareholders who had pushed climate to the forefront of the annual general meeting (AGM) and demanded Shell give specifics on how it would turn promises into action. However, a motion that proposed setting targets was defeated.
“Nobody else comes close, it is seriously ambitious,” van Beurden told investors when explaining Shell’s plans at the AGM.
But a growing number of major shareholders, who praised Shell’s overall plans, urged the Anglo-Dutch company to commit to firm targets to reduce carbon emissions from its oil and gas production, as well as from fuels it sells around the world.
“We call for this ambition to be translated into firm medium and short term targets, aligned with the Paris Agreement,” a group of 27 investors managing $7.9 trillion in assets said in a statement read at the AGM.
The group includes HSBC, BMO Capital Markets, AXA and UBS.
Shell’s board has urged shareholders to vote against a resolution brought forward for a vote at the AGM by activist group Follow This that called on Shell to set targets to reduce emissions and meet the 2015 Paris Climate Agreement goal that aims to limit global warming to “well below” 2 degrees Celsius.
The resolution was rejected by a majority of 95 percent.
The previous two climate resolutions tabled by Follow This in 2016 and 2017 secured support of 2.8 percent and 6.3 percent of the votes, respectively.
Van Beurden said that setting targets would hamper Shell’s efforts to adapt to the transition going on in energy.
He rejected accusations by Follow This founder Mark van Baal that Shell’s plans fell short of the Paris agreement goals.
“The reputation of our company is irrevocably linked to targets,” the chief executive said. “Nobody can see how the energy transition will play out over this period.”
Although the Follow This motion was defeated, van Baal said companies were under more pressure to set clear goals.
“There is a very clear signal that investors want targets, not ambitions,” he told reporters, adding that “the oil industry can make or break the Paris climate agreement.”
Last week, a group of 60 global investors urged companies to do more to reduce emissions and become more transparent about their plans.
Shell announced last year an ambition to slash emissions of greenhouse gases by 20 percent by 2035 and by half by 2050. The targets include Shell’s operations and emissions from consumers of its products.
Producing and burning of oil and gas account for around 50 percent of global carbon emissions.
At the AGM, shareholders also approved management’s 2017 remuneration, including van Beurden’s 8.9 million euro package, by an unusually small majority of 75 percent.
Reporting by Ron Bousso; Editing by Jason Neely and Edmund Blair