Aegon has called on fund managers to vote against climate transition plans at the upcoming Shell and Glencore AGMs.
Shell shareholders will meet tomorrow (21 May), before Glencore follows on 29 May.
Hilkka Komulainen, Aegon head of responsible investing, said the firm has “material questions” over the board’s ability to ensure its business model is sustainable over the longer term.
“We’d like to see Shell provide more accountability and comprehensive disclosures in line with its stated support for the Paris Agreement goals,” she said.
“There’s a lack of a credible plan for reducing absolute Scope Three emissions across the organisation.
“This can be seen by Shell’s weakened climate ambition, a new remuneration policy that rewards liquefied natural gas sales instead of low carbon product sales or building renewables, and the use of higher oil and gas price assumptions and lower investment hurdle rates than peers.”
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This year, there are two resolutions focused on Shell’s climate strategy.
There is a management proposal requesting shareholders’ approval of the updated energy transition strategy, which Morningstar director of investment stewardship research Lindsey Stewart said features “less ambitious” emissions reduction targets compared with the previous strategy.
Stewart said: “Last year, 20% of shareholders voted against management on both proposals, so any changes in those figures this year will give an important indication of institutional shareholders’ direction of travel on ambitious climate stewardship.”
Meanwhile, A survey of pension savers by PensionBee revealed that almost 60% of respondents – equal to nearly 18.5 million pensions savers – would vote in favour of wanting Shell to commit to reducing its greenhouse gas emissions by 2030.
Glencore
Commodity firm Glencore will face similar resolutions at their AGM next week, where shareholders will also be voting on the firm’s climate transition plans.
“We’re disappointed by Glencore’s reduced transparency on coal capex, despite investors’ calls for improved disclosure,” Komulainen said.
“There are concerns that Glencore’s lobbying activities – including the use of investor-state dispute settlement against states – have hindered climate policy developments.
“We’d like the company to consider going further – including disclosure on forward coal production guidance; clarity on its climate strategy for the Elk Valley Resources’ assets; and regard to industry best practice, such as the Greenhouse Gas protocol and the International Energy Agency’s Net Zero Emissions by 2050 pathway.”
