(Bloomberg) -- Royal Dutch Shell Plc has seen off the two most debated issues at its shareholder meeting -- the boss’s pay and responsibility in tackling climate change. But not without a degree of drama.
The company won the backing of about 94 percent of shareholders to not set specific emission-reduction targets, with Chief Executive Officer Ben van Beurden saying it is taking “leadership” on the issue. However, while almost 75 percent of investors also approved the remuneration report, it faced stiffer resistance after an influential advisory firm asked them to reject the package.
Van Beurden has said he understands best how to steer Europe’s largest oil and gas company through a life-changing energy transition, and is several steps ahead of what activist shareholders are demanding. A group of investors, who together manage more than $10 trillion of funds, last week wanted oil companies globally to take tougher action on emissions. Shell has faced a resolution on climate targets from investor group Follow This for a third year in a row.
“We hear Follow This wants us to take leadership. Your company is taking leadership. My response is: follow us,” Van Beurden said. “We have ambitions completely consistent and compatible with the Paris agreement.”
The push to eliminate carbon emissions from the world is a massive challenge for oil and gas companies. By Shell’s estimate, to achieve goals set out in the Paris Climate Agreement and reduce the risk of catastrophic climate change, by 2060 the world must be eliminating more carbon than it’s emitting.
Follow This argued Shell’s ambitions weren’t good enough and that it’s misleading to tell shareholders its plans are aligned with the Paris agreement. Van Beurden forcefully rejected the suggestion, right before the results of the vote were displayed on a large screen.
Mark van Baal, the founder of Follow This, told reporters after the meeting that he was pleased there was a debate on the topic. He said Shell’s announcement last year that it would set climate ambitions, which included reducing emissions from customers using their products, was partly due to Follow This’s advocacy.
No Plain Sailing
It was, however, not all plain sailing for Shell. While the company won support for its remuneration report, including Van Beurden’s 8.54 million euros ($10 million) pay last year, more than 25 percent of investors rejected it compared with about 8 percent last year. Institutional Shareholder Services Inc., an adviser on corporate governance, had recommended rejecting the report because the company was initially “silent” on a fatal accident in Pakistan.
The catastrophe occurred last June, after a fuel truck being driven by a Shell sub-contractor rolled over in Punjab province. People from a nearby village approached the site to collect spilling fuel, which then ignited, killing 221 people and injuring 56 others.
“We must learn from this devastating event,” Shell Chairman Chad Holliday said at the meeting. “We are doing a deep learning process around this tragedy.”
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