Failed climate resolution at Shell weakens investors' hand

Plus, climate change economic costs in 2100 compared to fighting an internal war - permanently.

In today’s edition:

— A failed shareholder resolution for more dramatic Scope 3 disclosure from Shell leaves the transition strategy in management’s control

— The economic costs of climate change in a few decades could be six times worse than forecast, new study claims

— As Exxon annual meeting nears, reports show oil company climate pledges falling short

— Deadly flooding in Brazil set to cause ‘unprecedented’ reconstruction expenses

— Job opportunities in climate finance and climate tech outpace overall employment gains

— Look out, as summer heat rises, a more intense fire season is just beginning

Greenpeace activists board oil platforms in Shell’s Brent field in 2019, protesting plans by the company to abandon parts of old oil structures with 11,000 tons of oil in the North Sea. Photo: Greenpeace.

Royal Dutch Shell’s annual general meeting in London, which descended into mob-driven chaos last year as protestors stormed the meeting hall and rushed the stage, passed more peacefully this week, though the climate transition was again the biggest point of controversy.

More than two dozen large investors, including Dutch pension fund manager MN, voted for a shareholder resolution requiring the oil major to better align its Scope 3, or supply chain, emissions with the goals of the Paris Agreement.

Management and other large investors, including Norway’s Norges Bank Investment Management, which manages the country’s massive oil fund, argue that existing plans to reduce Scope 3 emissions by 15% to 20% by 2030 are enough.

Shell reported after the meeting that the investor resolution failed, winning only 20% of the vote. The failure of the resolution will weaken investors’ hand in pushing managements to speed up their climate transitions and bode well for Exxon’s plans at its XOM 0.00%↑ annual meeting next week, which is also expected to be contentious.

While Shell SHEL 0.00%↑ and BP BP 0.00%↑ are the most climate-friendly of the big oil companies, compared to the likes of Exxon and Chevron CVX 0.00%↑ , they are still expanding production across most product lines, including liquified natural gas. Reducing emissions in one segment won’t stop overall emissions from growing.

The debate highlights the deep divide between oil companies such as Shell and large tech companies such as Amazon AMZN 0.00%↑ and Microsoft MSFT 0.00%↑ , whose energy demands are also causing emissions to rise but who are much more ambitious with their Scope 3 plans, as we saw from Microsoft’s announcement last week.

With investment giants still on both sides of the debate, it’s hard to see enough momentum for major shareholder resolutions like this to pass, at least this year.

Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.

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