Climate change dominates marathon Shell annual general meeting
Oil firm faces barrage of questions on commitment to battling global warming despite backing resolution passed by shareholders requiring it to take action
Demonstrators march through Seattle, Washington, on Monday, in protest against Arctic oil drilling following a lease agreement between Shell and the city’s port. (AP Photo/Ted S. Warren) Photograph: Ted S Warren/AP
Shell shareholders have voted through a resolution requiring it to test its business against international goals to limit climate change – but Britain’s biggest oil company faced a barrage of questions over its commitment to battle global warming.
At its annual general meeting in The Hague, 98.9% of votes supported the call for Shell to report on whether its activities were compatible with a pledge by governments to limit global warming to a 2C rise.
The resolution was filed by 150 investors controlling billions of pounds’ worth of its shares, under the banner Aiming for A. It includes a ban on corporate bonuses for activities that damage the climate and a requirement to invest in renewable energy.
Several investors who backed the proposal praised Shell’s board for supportingthe resolution, which was passed last month at BP. But the annual meeting, which lasted four and a half hours, was dominated by shareholders casting doubt on Shell’s climate change credentials and others criticising its continued efforts to extract fossil fuels.
Bill McGrew, a fund manager for the US’s biggest public pension fund, California’s Calpers, applauded the Anglo-Dutch company for recognising that climate change posed a threat to the world and to Shell’s business.
He said: “I carry an important message that US investors care. It’s not just a US voice; it’s not just a European voice; it’s a global voice expressing support for your leadership today.”
Others were more hostile. Investors from Alaska said Shell’s decision to drill for oil off the state’s northern coast threatened their communities. The board also faced questions on the company’s membership of lobby groups sceptical of climate change, the slow progress in developing renewable energy and the potential worthlessness of its assets under global climate change commitments.
Questions came from shareholders representing campaign groups such as Greenpeace and Global Witness but also from individual investors and fund managers.
A shareholder from Alaska said her community was in danger after a US government report said there was a 75% chance of at least one oil spill in the next 77 years if Shell was allowed to explore.
“We rely on the ocean for our food. I’m a grandmother with 17 grandkids. They are so afraid right now that with a 75% chance [of a spill] they will never be able to eat our traditional food again.”
Ben van Beurden, Shell’s chief executive, said that figure had been misunderstood and that the chance of a disaster was less than 1%.
Van Beurden has criticised the oil industry for being slow to admit to the existence of climate change and for relying too easily on the argument that environmental protection threatens jobs. But a Guardian investigation found that Shell’s own forecasts assume the Earth’s temperature will rise by almost double the 2C danger threshold adopted by governments.
Shell is also a member of the American Legislative Council (Alec), a political organisation that opposes policies that try to tackle climate change.
A shareholder told the board: “The international community wants you to change your policy for Earth and mankind. I want to ask you to stop the lobbying against sustainable energy.”
In his only expression of irritation during the meeting, Van Beurden replied: “I would suggest that you pay a little bit more attention to what we are doing and saying. I have never and the company has never advocated against renewable energy. We are one of the biggest investors.”
He said if Shell disagreed with industry groups it belonged to then the company put forward its own view separately.
Several shareholders told the company to go faster in developing alternative sources of energy such as solar power.
Mark van Baal, founder of a group of green Shell shareholders, said the company risked becoming redundant – “the next Kodak or Nokia” – if it delayed in switching away from oil and gas.
He added: “Enjoy the profit while you have it but let’s invest those profits in renewables, the energy of this century, and not just fossil fuels.”
Van Beurden said Shell would be at the forefront of change but that it needed to find more oil in the short term to meet the demands of population growth and economic development in emerging markets.
He rejected the idea that Shell could be left with “stranded assets” that cannot be extracted because climate change will make them unviable. He dismissed as a red herring the argument that there was a carbon bubble of investment in fossil fuels.
Van Beurden said in the second half of this century solar power would become dominant as a source of energy but that the world would have to rely on oil and other traditional fuels in the meantime.
Simon Henry, Shell’s finance director, said fossil fuels made up 80% of the world’s energy sources and that oil was needed to produce and transport food, make clothes and manufacture roofs. “Modern life would not be possible” without oil, he said.
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