Shell investors and climate activists rebel against the energy transition

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Shell suffered a shareholder revolt against its energy transition strategy for the second year in a row as was its annual meeting disrupted by climate activists.

20% of shareholders voted against Shell’s transition strategy and its progress over the past 12 months — the same proportion as last year — after the annual meeting opened to a cascade of protests.

Within 10 seconds of chairman Andrew Mackenzie beginning his introductory remarks, he was interrupted by the first protester being removed from the East London venue only for another activist to continue the protest. Every time a protester was pulled out, another stood up.

At one point, after nearly an hour of consecutive disruptions, two activists tried to storm the stage where the board was sitting. Shell’s security team was quick to stop them, briefly forming a human shield around Chief Executive Wael Sawan and the other Shell directors.

Tuesday’s shareholder meeting was the first under Sawan, appointed in January.

The new boss faced a number of critical questions from shareholders, who challenged the board about the pace at which the company intended to cut emissions.

The Church of England pension board said it backed the group when Shell was a “first mover” into the oil and gas sector in 2021, launching an energy transition strategy that included a pledge to cut emissions.

“Today, I’m sorry to say we’re taking a different path,” said Laura Hillis, investment director in charge of the fund, pointing to comments from Sawan that the company may consider investing longer in oil and gas production.

Despite criticism leveled by shareholders in the room, Sawan noted that 80% of shareholders, including Shell’s largest institutional investors, were again supportive of the company’s transition plans.

“I think the silent majority has been very clear with us about their expectations, and their expectations are ‘please find a balanced transition,’ which is what we’re trying to do,” said Sawan, speaking after the close of the meeting. meeting.

“The worst thing we can do is just throw money away [the energy transition]the best thing we can do is create scalable and profitable business models.”

Sawan said Shell remained committed to its 2021 energy transition strategy and was meeting those goals. But he also stressed, as he has previously, that Shell will continue to invest in oil and gas, while increasing spending on low-carbon forms of energy.

“The direction is unchanged, it’s more about how we execute to be able to achieve this and more importantly how we stay competitive because. . . the stock price performance is not where it should be.

A vote on a rival resolution by Dutch shareholder activist group Follow This, which says Shell’s plan does not go far enough and is not in line with the 2015 Paris climate accord, was also unchanged from 2022 with just over 20% of shareholders in support of the resolution.

“Your board of directors does not want to reduce emissions in this decade,” Mark van Baal, founder of Follow This, told the meeting, calling on shareholders to “separate short-term profits from long-term risk” arguing his call for a more aggressive reduction of emissions.

Mackenzie remained calm throughout the busy meeting, encouraging protesters to remain seated and make their statements during the question and answer session. “We want to have a civil debate,” she said.

Earlier in the meeting, another group of protesters, all of whom had to own Shell stock to gain entry, had broken into song singing “Go to Hell Shell” to the tune of Ray Charles’ song “Hit the Road Jack.” .

Mackenzie told the Financial Times he advised security to allow all shareholders in rather than attempting to screen arrivals for potential disruptors. “It’s all part of the exchange,” she said.