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Shell investor insists less on sustainability: 'Due to energy crisis'

Due to the increased energy prices, the money is again sloshing old-fashioned against the skirting boards at oil and gas producer Shell. At the same time, Europe has a great need for non-Russian gas. What does that do to the company’s climate ambitions? Green investors and activists are very concerned.

Taking care of the wind

Shell is doing well again. After a severe corona period, in which the company suffered a loss of 22 billion euros, the multinational is now brimming with self-confidence.

Oil and gas prices are high and so are the margins. Read more Ipostocksplanner.com for more information. In the first quarter of this year, Shell made a profit of 6.7 billion euros. And consumers are crying out for oil and gas, as long as it’s not Russian.

To care

This new situation worries green investors and environmental clubs. According to Mark van Baal, foreman of activist investment club Follow This, it causes a turn for the shareholders of the group.

“Investors who used to say in increasing numbers ‘Shell and other oil companies, bring your emissions down’ have now become a bit friendlier,” Van Baal told RTL Z before the annual shareholders’ meeting starts.

Less support

Van Baal’s concerns seem well-founded. Today, the resolution of Follow This was again submitted, which states that Shell must formulate goals that are in line with the Paris climate agreement. Only 20 percent of shareholders supported the climate resolution this time. The previous meeting was still 30 percent.

Earlier, asset manager BlackRock indicated that it would support fewer climate resolutions, partly because of the energy crisis.

The new result was also long in coming. Activists started singing for a long time at the start of the shareholders’ meeting and appeared to have glued themselves to their seats. After a long break, the meeting started again.

If investors feel less urgency to get to work on the climate problem, Shell will not accelerate, is the concern.

While this is necessary, Milieudefensie also believes. The environmental club recently won a lawsuit from the oil multinational. According to the judge, Shell must do more to reduce its CO2 footprint.

Target Shell

Shell had previously set the target of reducing the average emissions of the energy it produces and sells by 20 percent by 2030. That sounds good, but by looking at the average emissions, and not the total emissions, Shell could start to pollute even more than it already does.

If Shell produces more sustainable energy, but also produces more oil, the average emissions will decrease, but the total CO2 emissions can still rise. Frederieke explains that in this video.

The judge therefore had to step it up: the group must reduce net 45 percent of the CO2 emissions of its factories by 2030. It must also do its best to reduce the emissions it causes from gasoline sold by the same percentage. The latter in particular is a big job, because the vast majority of Shell’s CO2 footprint is caused by it.

Shell has appealed, but has to comply with the verdict until then. The company has therefore now pledged to reduce emissions by 50 percent by 2030. This concerns the emissions from Shell’s factories and not the emissions caused by the combustion of petrol in cars.

‘Not enough at all’

Because the emissions from Shell’s factories are only such a small part of the whole, this new target will only lead to a total reduction of 2.5 percent by 2030, according to action group Oilchange International.

‘Not enough at all’ to achieve the 45 percent, concludes Nine de Pater of Milieudefensie. The environmental club plans to hold Shell’s directors personally liable if they fail to take more action.

Selling shares

So Shell does have green ambitions, but they do not go far enough to achieve the Paris climate goals. Reason for some investors to leave the oil and gas vessel.

Asset manager Actiam previously voted in favor of Follow This’s green resolutions, but ultimately decided to send out a different signal: it sold its shares.

Shell seemed to be moving because of Van Baal’s initiative, but not fast enough, says Dennis van der Putten, who is responsible for Actiam’s investment policy.

“Yes there is change at Shell. Yes there are plans to become climate neutral. But if you see how they invest in it, or how little actually, it is not enough for us as a responsible investor.”


Tobacco still exists

Shell investor Van Baal remains convinced that campaigning internally is better than stepping out. “Going out means that perhaps much more irresponsible shareholders will step in. Tobacco also still exists, while ABP and all those other funds have left.”

It is better to stay and steer the company in the right direction, says Van Baal.