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Shell’s climate program isn’t well underway, LGIM says

Heavyweight LGIM joins shareholder rebellion against Shell’s plans to curb carbon emissions because it’s “not advanced enough”

  • LGIM, Legal & General’s wealth management arm, said Shell’s plans were “unreliable.”
  • Part of 30% LGIM to support a resolution by shareholder activist group Follow this
  • Follow this prompted shell to set “inspiring” goals to combat emissions
  • Another UK asset manager, Sarasin & Partners, has also put pressure on Shell and BP, saying it is not “serious” about achieving its net-zero emission target.

Legal & General’s wealth management department emerged as one of the investors who voted against the Royal Dutch Shell’s climate program last week.

LGIM acknowledged some progress today, saying that oil majors’ goals to reduce carbon emissions and oil and gas production are unreliable and inadequate for tackling climate change. Said.

A £ 1.3 trillion saver cash asset manager is working to encourage investees to act responsibly as part of it. Widespread promotion by legal and general to become more environmentally friendly..

“Shell must fall”: Protesters at Shell headquarters in The Hague last week

“The strength of the oil and gas production plans disclosed as the provisional target (until 2035) has not reached the level of ambition needed to ensure that the company is consistent with the 1.5C route. I’m still worried. ” LGIM told Guardian today.

Comments commented that about 30% of investors voted in favor of a resolution submitted by shareholder activist group Follow This, so Anglo-Netherlands companies set “exciting” goals to combat greenhouse gas emissions. Prompted to.

At its annual shareholders’ meeting last Tuesday, LGIM was one of the investors in support of a resolution that Shell’s board of directors called for a rejection.

One in ten shareholders voted against Shell’s energy transition strategy.

The plan, which was rejected by some shareholders, was announced by Shell in February. The company said it aims to reduce the overall carbon strength of the energy it produces by 2030 by 20% and by 2035 by 45%.

The ultimate goal of the shell is to reach zero net emissions By 2050-but He first admitted that the current plan was not enough to reach the goal.

“It is important to note that as of February 11, 2021, Shell’s operational plans and budgets do not reflect Shell’s net zero emissions target,” the group was buried in a February statement. I mentioned it in a note.

Follow This activists argued that absolute shell emissions could be reduced by just 10% over the next decade, and said LGIM supported a group of activists “on this occasion.”

Another UK asset manager, Sarasin & Partners, also recently put pressure on Shell and BP, saying it wasn’t “serious” about achieving its net-zero emission target.

Natasha Landell-Mills of Sarasin & Partners said this was due to the fact that they are still spending a lot of money on oil production and working on unrealistic prices and demand forecasts for oil and gas.

She states: ‘Beyond the eye-catching Net Zero ambitions announced to shareholders, two things are clear. First, most of their capital investment continues to replenish their fossil fuel supply.

“Second, these ambitions are possible only because the balance sheet continues to be supported by overly optimistic assumptions of future cash flows from oil and gas sales.”

Ben van Beurden, CEO of Royal Dutch Shell

Ben van Beurden, CEO of Royal Dutch Shell

She concluded that: “BP and Shell don’t believe they can take it seriously to reach Net Zero until their accounts and capital spending plans meet their goals.”

The International Energy Agency (IEA) said investors should stop funding new oil, gas and coal supply projects if the world wants to reach net zero emissions by 2050.

However, Shell plans to increase its investment in low carbon over the next few years, but at least 75 percent of its spending will continue to go to oil and gas.

In February, the group also announced that it would increase its production of liquefied natural gas by 2025, promising to strengthen wind and solar power throughout its business, unlike its rivals BP and Total. It was.

Shell CEO Ben van Baden said last week that investor support was “important” as the focus of the business shifted and “trying to fully understand” why he voted. Said.

Under the Paris Agreement, nearly 200 countries have agreed to limit global temperature rise to less than 2 ° C, aiming to stay above pre-industrial levels by 1.5 ° C.

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Shell’s climate program isn’t well underway, LGIM says

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