* LAPFF members manage over 300 bln stg in assets
* It questions Shell's CCS, tree planting plans
* Instead backs resolution from Follow This
* Shell says its resolution goes further than Follow This
(Adds Shell, Church of England Pensions Board comments)
LONDON, April 28 (Reuters) - Royal Dutch Shell’s
climate change strategy does not go far enough and investors
should advise against it at an upcoming meeting, a UK pension
funds group said on Wednesday.
Shell has asked investors to vote on its energy transition
strategy, although the vote is advisory only.
Its plans call for reaching net zero carbon emissions by
2050 supported by buyers of its fossil fuels investing in carbon
offsets from nature-based or carbon capture projects.
"The strategy as stated does not sufficiently address the
challenges Shell faces, with competition from renewable energy
potentially putting fossil fuel businesses out of business on
cost grounds alone," said Doug McMurdo, chair of the UK's Local
Authority Pension Fund Forum (LAPFF).
The group, whose 82 members manage over 300 billion pounds
($417 billion) in assets, said it recommended members oppose the
climate change strategy at Shell's annual general meeting on May
18.
"Its net zero strategy is couched in such terms that Shell
will decarbonise ‘in step with society’. That is not taking a
lead, that is a recipe for being left with stranded assets,"
McMurdo said.
The LAPFF will instead back a resolution from the Follow
This activist group calling for Shell's targets to be aligned
with the Paris Agreement on climate.
McMurdo questioned the Shell plan's reliance on carbon
capture and storage (CCS) and tree planting.
"There are references to relying on very large amounts of
carbon capture and storage, yet it is unclear for what products,
and CCS doesn’t work without subsidy and it does not result in
‘net zero’," he said.
McMurdo also said the scale of tree-planting required did
not seem credible, and nature-based solutions should be focused
on difficult-to-abate sectors such as cement, chemical
manufacturing and aviation.
Another Shell investor, the Church of England Pensions Board
(CEPB), also said these points needed further engagement and
"require Shell to provide evidence it is delivering on its
strategy".
Still, the CEPB is "likely to vote in support of Shell’s
energy transition strategy", said Adam Matthews, its chief
responsible investment officer in an article published online on
Wednesday.
A Shell spokeswoman said the company own resolution included
"measurable short, medium and long-term targets which go further
than that requested by Follow This" and called on shareholders
to vote against the Follow This resolution.
($1 = 0.7201 pounds)
(Reporting by Simon Jessop, Ron Bousso and Shadia Nasralla;
editing by Carolyn Cohn and Jason Neely)
