Shell endorses shareholder resolution on climate risk

The Royal Dutch Shell Board of Directors on Thursday (Jan. 29) endorsed a shareholder resolution requiring the company to commit to reduce emissions and invest in renewable energy, to do away with bonus systems that promote climate harming activities, and to stress test its business model against the two degrees Celsius warming limit adopted by 141 governments in the UN’s Copenhagen Accord, according to shareholder advocates As You Sow.

“It’s remarkable that a supermajor like Shell supports a shareholder resolution that boldly questions its own business model,” said Andrew Behar, CEO of As You Sow. “This acknowledgement of the need for change will ripple through the entire industry, and not a second too soon, as we see reports of 2014 being the hottest year on record. We see this as a signal to policymakers that the business community supports a robust global climate accord in Paris in 2015.”

The resolution was filed by the “Aiming for A” coalition of British investors and pension funds representing around £165 billion (€200 billion) assets. It calls on Shell to disclose additional information related to climate change in its annual reporting from 2016: ongoing operational emissions management; asset portfolio resilience to post-2035 scenarios; low-carbon energy R&D and investment strategies; relevant strategic key performance indicators (KPIs) and executive incentives; relevant key performance indicators and its public policy positions on climate change. The coalition has filed a similar resolution with oil company BP PLC.  A similar resolution at ExxonMobil filed in March 2014 was withdrawn when the company agreed to publish a report on stranded carbon asset risk.

According to Reuters, Shell’s executive vice president of investor relations JJ Traynor said the company would urge shareholders to vote for the resolution at the annual general meeting in May. In the same day the company announced that it would cut $15 billion in spending and will resume its drilling programme in Alaska’s Arctic after a near two-year suspension.

 

(Image: Sakhalin II, offshore LNG plant, Russia. Photo credit: Shell/Flickr)