SHELL PLC | Adopt Scope 3 GHG Targets (1.5C Aligned) at Shell PLC

AGM passed
AGM date
Previous AGM date
Proposal number
Resolution details
Company ticker
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Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • GHG targets / emissions
Type of vote
Shareholder proposal
Filer type
Company sector
Company HQ country
United Kingdom
Resolved clause
Resolved: Shareholders support the company, by an advisory vote, to align its medium-term emissions reduction targets covering the greenhouse gas (GHG) emissions of the use of its energy products (Scope 3) with the goal of the Paris Climate Agreement: to limit global warming to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C. The strategy for achieving these targets is entirely up to the board.
You have our support.
Supporting statement
The world has signed the Paris Agreement, pledging to limit global warming to well below 2°C and to pursue efforts to limit warming to 1.5°C. Failure to do so will have dramatic effects for society at large, including the global economy. Greenhouse gas (GHG) emissions are the leading driver of global warming. The Company is a leading contributor to global GHG emissions.
Paris alignment
Scientific consensus indicates that global emissions must almost halve this decade to keep 1.5°C within reach.
The Intergovernmental Panel on Climate Change (IPCC) stated that “unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to close to 1.5°C or even 2°C will be beyond reach.”1
Since the energy sector accounts for the vast majority of global emissions, it must achieve large-scale emissions reductions this decade to reach the goal of the Paris Climate Agreement.
The International Energy Agency (IEA) underscores the critical role of energy-related emissions in its Net Zero Roadmap, A Global Pathway to Keep the 1.5°C Goal in Reach: “Getting to net zero emissions by 2050 requires rapid and deep cuts in emissions of both carbon dioxide (CO2) and other greenhouse gases (GHG), particularly methane, by 2030.”2
As a result, for a major player in the energy sector, Paris alignment implies targets that significantly contribute to reducing global emissions by 2030.
The Company’s medium-term targets are not Paris aligned
Shell’s medium-term targets covering Scope 3 are a decrease of the Net Carbon Intensity (NCI) of 20% by 2030 and 45% by 2035 (at the time of filing this resolution), compared to 2016 levels.3
The Climate Action 100+ benchmark states that the Company’s medium-term GHG emissions reduction target(s) are not aligned with the goal of limiting global warming to 1.5°C.4
No third-party source indicates that Shell’s medium-term targets are aligned with a 1.5°C warming scenario.
Moreover, the Company does not sufficiently demonstrate how it will reach these targets, which means it is unclear how the underlying approach contributes to significant reductions in global emissions this decade.
Risks of misalignment
A lack of Paris-aligned targets poses significant risks to the Company. These risks include:
Regulation: As countries work to achieve their commitments under the Paris Agreement, more stringent regulations should be implemented. This risks leaving planned oil and gas projects stranded, which would result in significant losses to the Company. Uncertainty about the timing of the effects of climate change and shifts in public sentiment may bring about a disorderly transition, resulting in abrupt implementation of regulation, negatively affecting the profitability of fossil fuels and further increasing the risks of stranded assets.
Loss of market opportunity: As the global energy market transitions toward a net-zero energy system, there will be increased demand for low-carbon energy products. The Company risks losing the opportunities that this demand presents.
Litigation: Instances of climate litigation against oil majors are increasingly sharply. As the legal framework around this becomes more established and liability more certain, the Company is exposed to increasing financial liability.
Carbon lock-in: By investing recent record profits in continued fossil fuel extraction, the Company risks locking itself into an unsustainable business model.
We advise the Company to adopt Paris-aligned targets
By adopting Paris-aligned targets, the Company can spur innovation both internally and in the market as a whole. Furthermore, it sends a signal to policy makers that will help to advance the necessary regulation. Paris-aligned targets will help to protect the Company’s long-term value.
An increasing number of investors are realizing this, which is why support for this climate resolution has increased from 2.7% in 2016 to 20% in 2023.
A vote for this proposal is warranted by investors who seek to ensure a long-term future for the Company and to protect the value of their entire investment portfolios.
1. IPCC, August 2021: IPCC, August 2021: Climate change widespread, rapid, and intensifyingClimate change widespread, rapid, and intensifying
2. IEA, September 2023: Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach – 2023 Update (page 108)(page 108)
3. Shell’s strategy: Net Carbon Intensity (NCI) is the Company's proprietary intensity metric which combines the emissions of its operations and use of its energy products (Scopes 1, 2, and 3) into a single intensity figure in terms of the grams of carbon dioxide equivalent (gCO2eq) per unit of energy (MJ) sold.
4. CA100+, 2023: Net Zero Company Benchmark – Shell plc

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Brunel Pension Partnership (BPP) For Rationale: Inadequate management of climate related risks.

Shell's new target on scope 3 is not substantive given lack of coverage of their LNG business despite expansion plans

There is a lack of clarity on how the company's targets are Paris aligned
MN For We will vote FOR this advisory resolution, the responsibility for determining the strategy lies with the executive committee and the board of the company. The advisory resolution filed by 27 shareholders, supports our goal to align our portfolio with the Paris Climate Agreement. We share the company’s new ambition to lower scope 3 emissions from the oil products the company sells with 15-20% by 2030. However, the scope 3 reductions will be offset by growth in fossil LNG production of 20-30% by 2030. We do not believe this level of fossil LNG growth aligns with pathways to the Paris Climate Agreement.
Degroof Petercam Asset Management (DPAM) For
LBPAM La Banque Postale Asset Management For
Robeco For
KLP For KLP will vote FOR this shareholder resolution. We expect the company to present an energy transition plan aligned with the 1.5°C pathway of the Paris climate agreement. A credible transition plan/strategy should include short, medium and long-term targets for absolute scope 3 emission reductions.

We further note that KLP will subsequently vote against Shell's Energy Transition Strategy (Item 22 on the AGM agenda).
Aktia Bank p.l.c. For
VidaCaixa For
Pensioenfonds Rail & Openbaar Vervoer For
Rathbones Group Plc For
AP4 For
Lothian Pension Fund For This shareholder proposal requests that the company, by an advisory vote, aligns its medium-term emissions reduction targets covering the greenhouse gas emissions of the use of its energy products (Scope 3) with the goals of the Paris Agreement. This vote is warranted due to the perceived lack of indicators regarding the alignment of the company's strategy to the Paris Agreement goals, and the benefits of further analysis and disclosures to demonstrate this.

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