(Alliance News) - Royal Dutch Shell PLC on Tuesday said it won the support of a majority of its shareholders to reject a climate resolution proposed by Follow This, an activist group which called on the oil firm to adopt "truly Paris Aligned emissions reduction targets".
In addition, just shy of 89% of Shell's investors backed the oil major's own energy transition motion, paving the way for the company to pursue its plan to reach net zero carbon emissions by 2050.
A special shareholder resolution, which Shell called on investors to reject, received just over 30% of support at Tuesday's annual general meeting. The shareholder motion was proposed by Follow This.
"The resolution asked, again, for truly Paris [Agreement]-aligned emissions reduction targets, and for Shell to shift its investments towards renewables," a statement from Follow This said.
Shell said the resolution was not in the best interests of the company.
Follow This, which saw a similar motion in 2020 receive just 14% of support, said 2021's result was a "strong signal" to Shell.
Follow This founder Mark van Baal said: "Shell's policy falls short of what is needed to protect investors from devastating climate change."
Follow This added that Shell's climate promises are "for the distant future" and are failing "to convince investors".
Shell in February set out plans to reach net zero carbon emissions by 2050, while at the same time shrinking debt and maintaining a "progressive dividend policy".
By 2023, it aims to shrink net carbon intensity by between 6% and 8%, 20% by 2030, and 45% by 2035 before complete elimination on a net basis by 2050, using 2016 as a baseline.
Following Tuesday's AGM result, Shell Chief Executive Officer Ben van Beurden said: "Shareholder support is critical as our business changes and we work towards our target to become a net-zero emissions energy business by 2050, in step with society. This shareholder vote on our energy transition strategy is a first for an energy company and we are pleased shareholders demonstrated their strong endorsement with more than 88% of votes cast in favour of our strategy.
"We thank shareholders for their support and look forward to our continued engagement with them. We also note the outcome of the vote on shareholder resolution number 21. We will seek to fully understand the reason why shareholders voted as they did, particularly those who voted both 'for' Shell's strategy and 'for' the shareholder resolution, and will formally report back to investors within six months."
All other proposals at the AGM were passed.
Shell's A shares were 1.0% higher at 1,440.20 pence each in London on Tuesday afternoon. The B stock was up 1.0% at 1,381.40p.
By Eric Cunha; ericcunha@alliancenews.com
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