Climate resolutions at Shell and BP AGMs shift focus from Paris alignment to shareholder value
Investors filing climate resolutions at Shell and BP are reframing the debate, demanding a financial case for oil and gas expansion rather than Paris alignment
More than 20 major investors, including Dutch manager Achmea Investment Management, US firm Mercy Investment Services, several LGPS funds and Swiss pension investors such as Ethos and publica, have filed resolutions at Shell and BP. In the case of Shell, the proposal has, for the first time, received backing from individual employees.
While previous resolutions have called on oil majors to set out plans to align with the Paris Agreement, this year’s proposals reframe the issue. Instead, they ask companies to explain the financial case for continued investment in oil and gas in the context of declining demand.
In recent years, climate-focused shareholder resolutions at Shell and BP have consistently attracted support of around 20%, but have failed to gain significantly broader backing, leaving climate-conscious investors at an impasse.
This year’s AGMs will take place against the backdrop of changing macroeconomic conditions. Global oil prices have fallen by more than $20 per barrel over the past year, from above $80 in 2024 to below $60 by mid-January, putting pressure on profit margins.
The International Energy Agency has warned that global oil demand could plateau and then decline from 2030. Chinese oil demand is expected to peak within this decade, while LNG markets could soon face oversupply.
“These resolutions are designed to increase shareholder pressure and focus attention on the financial unsustainability of fossil fuel business models,” said Mark van Baal, founder of Follow This. “If declining oil and gas demand undermines shareholder value, boards must be transparent about whether they plan to transition or manage an orderly wind-down.”
“As an active owner, we expect the companies in which we invest to be transparent about the strategic levers their management can utilise to create resilience and generate shareholder value under a range of plausible scenarios,” said Gillian de Candole, head of responsible investment at the £10bn Lothian Pension Fund.
The Shell resolution sets a new precedent by being backed for the first time by current and former employees. Five current and 19 former Shell employees support the proposal, citing concerns about the company’s long-term viability.
“As current and former Shell employees, we want the company to have a future,” said Arjan Keizer, one of the former employees supporting the resolution. “The board should be transparent about how Shell plans to create value as fossil fuel demand declines. Shareholders and employees need this information to make informed decisions about whether to stay or to go.”
Shell and BP have yet to publish their notices of AGM, although both meetings typically take place in April or May. Last year, BP announced a major reversal of its climate strategy after the deadline for filing shareholder resolutions had passed. The move contributed to nearly a quarter of shareholders voting against the reappointment of chair Helge Lund.
