Norway’s state investment fund has urged Shell to clarify its climate targets as the oil group braces for its biggest ever green shareholder rebellion at next week’s annual general meeting.
Norges Bank Investment Management (NBIM), which manages $1.6tn on behalf of the people of Norway and is one of Shell’s largest investors, urged the company to give investors more information about its plans for the next decade after its new chief executive watered down climate commitments earlier this year.
Shell’s board will on Tuesday face a shareholder resolution backed by 27 of its investors – holding 2.5% of its shares – calling for the company to align its business plans with the Paris climate agreement.
The push, which has been coordinated by the Dutch campaign group Follow This, is understood to be the largest such climate rebellion mounted against Shell’s directors in terms of the size of the funds involved.
NBIM, which invests the proceeds from Norway’s own fossil fuel reserves and holds just over 3% of Shell, has stopped short of backing the campaign but has called for the company to make “additional disclosures” to reduce the uncertainty over its climate agenda.
Shell angered green groups earlier this year after its new chief executive watered down a key climate target as it prepared to grow its liquefied natural gas business through the 2030s.
NBIM said Shell’s strategy “has evolved” under the leadership of Wael Sawan – who last year claimed it was “dangerous” to reduce fossil fuel production – but it still believed its strategy retained “the core components of a Paris-aligned transition plan”.
Shell has signalled it may slow the pace of carbon reforms for this decade, with a plan to cut the emissions intensity of the energy it sells by 15-20% by the end of the decade, down from a previous target of 20%. It has not set a scope 3 emissions target for its gas business, which is expected to grow by 50% by 2040.
“Our expectations ask for interim and net zero targets. We have encouraged Shell to make additional strategy disclosures that could reduce uncertainty about the company’s direction in the mid-2030s,” NBIM said.
Mark van Baal, the founder of Follow This, said NBIM’s decision to vote against the campaign’s climate resolution “puts its climate credibility into question” and could delay Shell’s climate progress.
“Why should Shell do more than just talk about climate if one of its biggest shareholders only talks and refuses to do the bare minimum, which is to vote for a climate resolution filed by 27 of its peers,” Van Baal said.
The main investor proxy voting advisory agencies, Glass Lewis and ISS, have advised shareholders to vote against the Follow This resolution.
