The Shell AGM: A 5.1% Wedge to Create a Space for Change

By Jeanne Martin, Senior Campaigns Officer

Last November, Dutch investor group Follow This filed a shareholder resolution, of which ShareAction was a proud co-filer, at Shell. The shareholder resolution had a single and simple ask: that Shell, soon-to-be the world’s largest oil company, sets emissions targets in line with the goals of the Paris climate agreement.  

2017 shattered climate records, as did 2016 before it. The US experienced its 5th most active hurricane season in recorded history, Arctic ice was found to melt faster than expected, and the current warming trajectory could make Marine Protected Areas uninhabitable by most species by the end of the century. 

Yet these warning signs were not enough to convince a majority of Shell’s shareholders to vote in favour of the resolution. In fact, the resolution only garnered 5.1% support and 7.23% of abstentions.  

When the voting result appeared on the screen, I was engulfed by a feeling of despair.  

But surrendering to despair is not a winning strategy. In the words of anti-war activist and people’s historian Howard Zinn, “The struggle for justice should never be abandoned because of the apparent overwhelming power of those who have the guns and the money and who seem invincible in their determination to hold onto it. That apparent power has, again and again, proved vulnerable to moral fervor, determination, unity, organization, sacrifice, wit, ingenuity, courage, and patience.”  


While it wasn’t enough to convince more than 75% to support the resolution, management dissent rose to 12% this year – a clear sign that investors are not satisfied with Shell’s Net Carbon Footprint Ambition to reduce its greenhouse gas intensity by 20% by 2035 and by around half by 2050.


Working in the climate field presents the danger of tying your sense of worth to a problem as scary, complex and large as climate change. But, says blogger Abby Brockman: “There is a difference between our actions being worthless and our actions not accomplishing what we hoped they would.” 

But has it not? In this blog I explore three reasons why the 2018 Follow This resolution should provide hope for the future. I am using Rebecca Solnit‘s definition of hope. “[Hope] is not the belief that everything was, is or will be fine. The evidence is all around us of tremendous suffering and destruction. The hope I’m interested in is about broad perspectives with specific possibilities, ones that invite or demand that we act. It is also not a sunny everything-is-getting-better narrative, though it may be a counter to the everything-is-getting-worse one.” 

1. Investors are speaking up about their discontent

The months before the Shell AGM saw a group of progressive investors publicly stepping up their engagement with Shell. The Church of England Pensions Board and the Environment Agency Pension Fund wrote an open letter to Shell Chairman asking the company to set Paris-aligned targets; the second and eighth largest Dutch investors and a group of leading French investors pre-announced their support for the resolution and a coalition of UK investors urged their peers to vote in favour of the resolution. These investors recognise the scale of the challenge and stepped up their engagement game accordingly.  

While it wasn’t enough to convince more than 75% of shareholders to support the resolution, management dissent rose to 12% this year – a clear sign that investors are not satisfied with Shell’s Net Carbon Footprint Ambition to reduce its greenhouse gas intensity by 20% by 2035 and by around half by 2050.  Furthermore, according to Follow This, none of the top 10 Dutch shareholders voted against the resolution – a clear sign that Shell, even though it is headquartered in the Netherlands, is increasingly losing touch with the Dutch community. 

2. Investors want Shell to fully embrace the low-carbon transition

Earlier this year, ShareAction published an analysis comparing Shell’s net carbon footprint ambition and the ask of the Follow This resolution. In particular, it found that Shell’s ambition was not in line with a majority of <2C scenarios and would not drive meaningful corporate change – targets would. Investors clearly understood that. At the AGM, Hermes EOS expressed concerns about “the use of the term ambition, rather than target, (which) has raised doubts about the company’s commitment to this goal”.  


Church of England Pensions Board: “My question is therefore to ask if the Board, whatever the outcome of the Follow This vote, will re-consider its position on targets. It is clear from the statements made by other major investors today, in the media before the AGM, and through the Climate Action 100+ initiative, that there is strong shareholder support for such further action by Shell.”


This concern was shared by a coalition of investors representing $7.9 trillions of assets under management who asked Shell to set medium and long-term targets in line with Paris. 

Europe’s largest pension fund ABP and APG asked Shell to “show (investors) serious commitment that wont just fade over time” by integrating its Net Carbon Footprint Ambition into its Long-term Incentive Plan. 

The Church of England, an early advocate of the resolution, summarised the situation pretty clearly in their statement to the board: “My question is therefore to ask if the Board, whatever the outcome of the Follow This vote, will re-consider its position on targets. It is clear from the statements made by other major investors today, in the media before the AGM, and through the Climate Action 100+ initiative, that there is strong shareholder support for such further action by Shell.”

In other words, regardless of the voting result, Shell shareholders want to see their company set Paris-aligned targets. 

3. The resolution ignited a debate on target-setting at all oil and gas companies

Prior to the Shell AGM, 60 investors representing almost $10.5 trillions in assets demanded oil and gas companies to intensify their efforts on climate change and take responsibility for all of their emissions. 

Matt Crossman, who read the statement on behalf of investors representing $7.9 in assets, said: “Only committing Shell to transitioning would put the company at a disadvantage. Therefore our engagement must be much broader and extend to all oil and gas companies. You’ve raised the bar for these companies. Yet Shell’s climate ambition allows for inertia in the next few years, but action needs to start today.” This sentiment was echoed by other investors such as the Church of England and the Environment Agency Pension Fund. 

The resolution ignited a debate on target-setting at all oil and gas companies.

What’s next?

The next few years will test investors’ true commitment to Paris, and will see a rise of climate-related shareholder resolutions and proxy revolts at European oil companies.  


Matt Crossman, who read the statement on behalf of investors representing $7.9 in assets, said: “Only committing Shell to transitioning would put the company at a disadvantage. Therefore our engagement must be much broader and extend to all oil and gas companies. You’ve raised the bar for these companies. Yet Shell’s climate ambition allows for inertia in the next few years, but action needs to start today.”


The success of these efforts will depend on and be reinforced by existing trends such as: 

  • Fossil fuel consumers going renewable: Last month saw more than 100 global companies announcing their Science-Based Targets, and 305 committing to set one in the next two years; 
  • Banks, such as BNP Paribas, HSBC and RBS, refusing to provide funds to new oil sands and Arctic oil projects; 
  • Civil society expanding the tools at hand to drive change, such as Friends of the Earth Netherlands and its 11,931 co-plaintiffs taking Shell to court for its failure to align with Paris; indigenous peoples and local communities physically resisting new fossil fuel projects in the UK and Canada and the Pacific; and ordinary citizens using AGM activism to drive corporate change.  

 The challenge remains huge and will continue to feel unsurmountable at times. But interim wins need to be celebrated properly. Last week saw some of the world’s largest investors telling the oil and gas sector: align with Paris, or else. This would be have been unimaginable a couple of years ago. But verbal commitments are meaningless if not followed up by concrete actions. In the next few years, ShareAction will work hard to make sure that investors keep to their word.

Thanks Jeanne! To learn more about our fossil fuel work click here or contact Jeanne.

Beau O'SullivanThe Shell AGM: A 5.1% Wedge to Create a Space for Change