|Royal Dutch Shell plc||2018||N/A||https://www.blackrock.com/corporate/literature/press-release/blk-vote-bulletin-royal-dutch-shell-may-2018.pdf|
For several years, the Investment Stewardship team has engaged extensively with Shell’s management and Board on a range of topics, including the adaptation to a low carbon economy. These engagements provided an opportunity to discuss the company’s climate risk governance, strategy and management practices. These engagements gave us insight into the substantive progress the company has been taking to manage climate-related risks and opportunities. It practices have over time demonstrated a strong commitment to continued improvements of its climate strategy, targets and disclosures.
Again this year we engaged with both Shell’s management and its Board, and the proponent to review the resolution and understand the different perspectives. We also participated in a collaborative investor engagement with Share Action to consider additional investor perspectives on the matter.
Demonstrating the company’s commitment to work collaboratively with shareholders on the issue of climate risk management and disclosure, the Board supported a shareholder proposal at the 2015 Shell AGM from the “Aiming for A” Coalition of investors. The resolution requested that Shell improve its annual reporting from 2016 onwards on the risks and opportunities associated with climate change. With the Board’s support the proposal received 95.7% votes in favor. Since this time, the company has made continued progress in responding to the energy transition as evidenced, for example, by the challenging goal of reducing its net carbon footprint, including the use of its energy products sold to align with “society-wide Paris ambitions” (around 50% reduction of net carbon footprint of energy products by 2050, around 20% by 2035 (gCO2e/MJ)).
- Setting and publishing greenhouse gas (“GHG”) reduction targets
Based on the company’s public disclosures, engagements with Shell’s management and Board as well as our wider engagement work and analysis we concluded that, at this stage, the proposal was unnecessarily prescriptive and could lead to potentially unintended consequences impacting the long-term value of our clients’ assets. We therefore voted with management and did not support the shareholder resolution at the 2018 annual general meeting (AGM).