Investors challenge Shell over plans for decline in fossil fuel demand
Idag, 15:17
(Alliance News) - Investors have repeatedly challenged Shell PLC over its plans for the potential long-term decline in fossil fuel demand at the oil major's annual general meeting.
The company's board defended its ongoing investments in oil and gas as shareholders gathered at the Sofitel Hotel at Heathrow Airport on Tuesday morning.
It came after a group of 21 institutional investors, led by Dutch campaign group Follow This, filed a proposal calling for the company to publish a strategy on how it plans to create shareholder value under the scenario that fossil fuel demand falls as the world transitions to clean energy.
The resolution received 12.7% of investor votes, according to provisional figures.
While not receiving the required support to pass or enough backing to be considered a shareholder revolt, campaigners behind the resolution said the double-digit support shows "significant doubt among investors" over Shell's fossil-focused strategy.
But the result also marks a drop in support for shareholder climate resolutions from previous years after proposals received 20.6% in 2025 and saw a peak of 30.5% in 2021.
Shell's board urged shareholders to oppose the resolution, as did major proxy advisors ISS and Glass Lewis, which can have sway over how big investors vote.
The company argued that it already addresses the issue in existing reports.
In his opening remarks, Chair Andrew Mackenzie said he "won't give you a single answer" when it comes to questions on what Shell will look like in 10-30 years.
"But what I can tell you is this: where demand rises, our determination is to help meet it," he said.
"Where the energy system is ready to change, we are ready to move with it. And where the world looks for a business that can navigate the complexity of the decades ahead, Shell can be that business."
The oil major revealed mammoth profits for the first quarter of the year thanks to rocketing oil prices caused by the Iran war.
Chief Executive Wael Sawan said the crisis has provided "another reminder of the fundamental importance of energy" as Iran's stranglehold on the Strait of Hormuz continues to squeeze global oil and gas supply, sending prices across countries and industries skyrocketing.
Sawan argued that the world "needs to maintain secure energy supplies while accelerating the transition to affordable low-carbon solutions".
In recent years, the company weakened several short-term and medium-term climate targets, citing uncertainty in the energy transition, though it has maintained its plan to cut emissions to net zero by 2050.
Confronting the board about its "carbon-based business model" during a Q&A session, Mark van Baal, founder of Follow This, highlighted how Shell cut its dividend payments to shareholders by 66% when oil demand plummeted during the 2020 coronavirus pandemic.
"Imagine what happens when it declines structurally," he said before asking the board why they do not want to publish a plan for this scenario.
"It is easy to be distracted by temporary profits and lose sight of the long term," he warned other shareholders.
In response, Sawan said the board believes the resolution could "create a precedent for recurring single source scenario-based disclosure, which ultimately adds costs without helping our investors".
He added that the resolution would not just be "damaging but duplicative" because the issue is already covered in existing reports it shares.
"Shell's strategy has long been to secure oil and gas production that is advantaged on costs and carbon, offering us resilience in different demand scenarios," he said.
van Baal challenged the board again, accusing bosses of not wanting to leave their "comfort zone" in fossil fuels and having no plan to diversify in the event of declining demand.
He was among many shareholders who quizzed the board about its climate targets, progress on cutting planet-heating emissions, and investments in oil and gas projects in the face of the potential for declining demand.
Responding to one of these questions, Mackenzie said: "[In] all of our scenarios and indeed our plans for the future evolution of the energy system, we see that hydrocarbons will continue to play a significant role – in both oil and gas – and the way we handle that is, of course, that we are investing in a number of ways in which we can decarbonise the impact of the use of hydrocarbons."
Mackenzie also criticised shareholder resolutions as a means to debate such issues, arguing that engaging directly with investors is a "more sensible way to conduct the debate".
Separately, protest group Fossil Fuel London staged an action to coincide with the AGM by placing a massive oil barrel outside the firm's London headquarters.
Some dressed as oil executives, drinking champagne glasses filled with black treacle representing oil and pouring it over themselves, while others held a large banner reading: "The World vs Shell".
The group said it wanted to highlight frontline communities in the Philippines and the Niger Delta, which are both lodging cases in London courts related to environmental impacts.
Shell shares were 0.4% higher at 3,301.50 pence each on Tuesday afternoon in London.
By Rebecca Speare-Cole, Press Association Sustainability Reporter
Press Association: Finance
source: PA
Copyright 2026 Alliance News Ltd. All Rights Reserved.
Investors challenge Shell over plans for decline in fossil fuel demand
Idag, 15:17
(Alliance News) - Investors have repeatedly challenged Shell PLC over its plans for the potential long-term decline in fossil fuel demand at the oil major's annual general meeting.
The company's board defended its ongoing investments in oil and gas as shareholders gathered at the Sofitel Hotel at Heathrow Airport on Tuesday morning.
It came after a group of 21 institutional investors, led by Dutch campaign group Follow This, filed a proposal calling for the company to publish a strategy on how it plans to create shareholder value under the scenario that fossil fuel demand falls as the world transitions to clean energy.
The resolution received 12.7% of investor votes, according to provisional figures.
While not receiving the required support to pass or enough backing to be considered a shareholder revolt, campaigners behind the resolution said the double-digit support shows "significant doubt among investors" over Shell's fossil-focused strategy.
But the result also marks a drop in support for shareholder climate resolutions from previous years after proposals received 20.6% in 2025 and saw a peak of 30.5% in 2021.
Shell's board urged shareholders to oppose the resolution, as did major proxy advisors ISS and Glass Lewis, which can have sway over how big investors vote.
The company argued that it already addresses the issue in existing reports.
In his opening remarks, Chair Andrew Mackenzie said he "won't give you a single answer" when it comes to questions on what Shell will look like in 10-30 years.
"But what I can tell you is this: where demand rises, our determination is to help meet it," he said.
"Where the energy system is ready to change, we are ready to move with it. And where the world looks for a business that can navigate the complexity of the decades ahead, Shell can be that business."
The oil major revealed mammoth profits for the first quarter of the year thanks to rocketing oil prices caused by the Iran war.
Chief Executive Wael Sawan said the crisis has provided "another reminder of the fundamental importance of energy" as Iran's stranglehold on the Strait of Hormuz continues to squeeze global oil and gas supply, sending prices across countries and industries skyrocketing.
Sawan argued that the world "needs to maintain secure energy supplies while accelerating the transition to affordable low-carbon solutions".
In recent years, the company weakened several short-term and medium-term climate targets, citing uncertainty in the energy transition, though it has maintained its plan to cut emissions to net zero by 2050.
Confronting the board about its "carbon-based business model" during a Q&A session, Mark van Baal, founder of Follow This, highlighted how Shell cut its dividend payments to shareholders by 66% when oil demand plummeted during the 2020 coronavirus pandemic.
"Imagine what happens when it declines structurally," he said before asking the board why they do not want to publish a plan for this scenario.
"It is easy to be distracted by temporary profits and lose sight of the long term," he warned other shareholders.
In response, Sawan said the board believes the resolution could "create a precedent for recurring single source scenario-based disclosure, which ultimately adds costs without helping our investors".
He added that the resolution would not just be "damaging but duplicative" because the issue is already covered in existing reports it shares.
"Shell's strategy has long been to secure oil and gas production that is advantaged on costs and carbon, offering us resilience in different demand scenarios," he said.
van Baal challenged the board again, accusing bosses of not wanting to leave their "comfort zone" in fossil fuels and having no plan to diversify in the event of declining demand.
He was among many shareholders who quizzed the board about its climate targets, progress on cutting planet-heating emissions, and investments in oil and gas projects in the face of the potential for declining demand.
Responding to one of these questions, Mackenzie said: "[In] all of our scenarios and indeed our plans for the future evolution of the energy system, we see that hydrocarbons will continue to play a significant role – in both oil and gas – and the way we handle that is, of course, that we are investing in a number of ways in which we can decarbonise the impact of the use of hydrocarbons."
Mackenzie also criticised shareholder resolutions as a means to debate such issues, arguing that engaging directly with investors is a "more sensible way to conduct the debate".
Separately, protest group Fossil Fuel London staged an action to coincide with the AGM by placing a massive oil barrel outside the firm's London headquarters.
Some dressed as oil executives, drinking champagne glasses filled with black treacle representing oil and pouring it over themselves, while others held a large banner reading: "The World vs Shell".
The group said it wanted to highlight frontline communities in the Philippines and the Niger Delta, which are both lodging cases in London courts related to environmental impacts.
Shell shares were 0.4% higher at 3,301.50 pence each on Tuesday afternoon in London.
By Rebecca Speare-Cole, Press Association Sustainability Reporter
Press Association: Finance
source: PA
Copyright 2026 Alliance News Ltd. All Rights Reserved.
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