RWC has announced its voting intentions for the Royal Dutch Shell AGM scheduled for 18 May 2021.
While RWC welcomed the progress that Royal Dutch Shell has made over 2020 and 2021 in its efforts to reduce carbon emissions, it views the energy transition plans as not ambitious enough. Furthermore the firm said the plan was ‘unsatisfactory in its detail’ and does not put the company on a path to alignment with The Paris Agreement within this decade.
The arguments underlying the “Follow This” shareholder proposal raise legitimate concerns around capital expenditure and the use of carbon offsets. Meanwhile the medium-term emission reduction targets are not aligned with the Paris Agreement.
For these reasons, RWC has decided to vote against the proposal seeking endorsement of the company’s Energy Transition Strategy, and has supported the proposal filed by Follow This.
RWC also calls on Sir Andrew MacKenzie, incoming chairman, to take the opportunity to perform a full review of the company’s plans and to improve upon them so as to put them on a path to alignment with The Paris Agreement, as the company has noted it is committed to supporting fully.
In the meantime, RWC’s investment teams will continue to engage with the company on related issues both directly and, as appropriate, through collaborative efforts such as the ClimateAction100+ initiative of which RWC is a member.
All other proposals are being supported.
John Teahan of the RWC Equity Income team said “Greater ambition on the company’s medium-term GHG emission reduction targets and clarity on how capital expenditure plans align with those targets, would give investors confidence in Shell’s intentions of fully aligning with The Paris Agreement. It is also very important to see carbon offset plans that are credible and achievable in an industry-wide context.
It is becoming ever more important for our clients that the fossil-fuel producers in which we invest articulate a strategy that can be commercially successful and in line with what society needs to do to limit global warming. If we are not able to convince our clients that fossil-fuel producers are able to do both of those things, we may lose the ability to allocate capital to those companies.”
At 4 May 2021, RWC held around 15 million shares in Shell.
