Shell’s new energy transition strategy got the backing of 78% of shareholders at the company’s general meeting on May 22 with reduced carbon-emissions targets, while rejecting a resolution asking the oil and gas giant to align itself with the Paris Climate Agreement.
Only 19% voted for the climate resolution, filed by activist shareholder Follow This Resolution 2024 and 27 investors — including Amundi SA, Europe’s largest asset manager — that jointly manage funds worth more than $4 trillion.
“I’m very pleased with what we’ve got” in support from investors, Shell CEO Wael Sawan said. “And I’m pleased that we have seen the Follow This resolution get an even lower share of the votes compared to previous years.”
Following Russia’s invasion of Ukraine and Europe’s subsequent energy crisis, concerns about security of supply have increasingly competed with climate change for investors’ attention.
At its Capital Markets Day in June 2023, Shell outlined that its energy transition strategy delivers more value with less emissions.
Shell’s target to achieve net-zero emissions by 2050 across all operations and energy products is transforming business, leaders said, who believe it beats the goal of the Paris Agreement to limit global warming to 1.5°C above pre-industrial levels.
Shell’s strategy supports a balanced and orderly transition away from fossil fuels to low-carbon energy solutions to maintain secure and affordable energy supplies.
The world’s primary energy demand is just over 300 million b/d with around 250 thousand b/d from fossil fuels.
As demand for energy continues to grow, driven by growing populations and increasing prosperity, the world must transition from fossil fuels to low-carbon energy in a balanced way to achieve net-zero emissions, the company outlined in its strategy report.
The energy transition update was the first since 2021, when the company launched its Powering Progress strategy regarding progress toward helping to build a low-carbon energy system for the future.
The corporation’s goal is to halve emissions from operations compared to 2016 on a net basis, and by the end of 2023 Shell had achieved more than 60% of the target.
Shell also reduced the net carbon intensity of the energy products it sells by 6.3% compared with 2016, the third consecutive year it hit its target.
The company confirms it will invest $10-15 billion between 2023 and the end of 2025 in low-carbon energy solutions, making Shell a significant investor in the energy transition.
“Energy has made an incredible contribution to human development, allowing many people around the world to live more prosperous lives. Today, the world must meet growing demand for energy while tackling the urgent challenge of climate change. I am encouraged by the rapid progress in the energy transition in recent years in many countries and technologies, which reinforces my deep conviction in the direction of our strategy,” Sawan said.
“Shell has a very important role to play in providing the energy the world needs today, and in helping to build the low-carbon energy system of the future. Our focus on performance, discipline and simplification is driving clear choices about where we can have the greatest impact through the energy transition and create the most value for our investors and customers. We believe this focus makes it more, not less, likely that we will achieve our climate targets. By providing the different kinds of energy the world needs, we believe we are the investment case and the partner of choice through the energy transition,” Sawan said.
Shell’s investments include electric vehicle charging, biofuels, renewable power, hydrogen and CCS.
Investments in new technologies help reduce emissions for the company and its customers. They are aiming to help scale new technologies to make them an affordable choice for customers and are focusing advocacy on key areas they believe are critical to the energy transition: policies that support national net-zero ambitions including carbon pricing, supplying the secure energy the world needs, driving changes in demand and growing low-carbon solutions.
