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Shell plc’s (Shell) first AGM in London on 24 May 2022 proved to be a tumultuous one, as proceedings were soon brought to a halt by shareholders protesting its approach to climate change and the speed at which the Anglo-Dutch oil and gas company was attempting to transition away from carbon intensive methods in its operations. Eventually, board chair, Andrew MacKenzie, was forced to ask other shareholders to vacate Central Hall Westminster in order to allow the Metropolitan Police to remove the protestors. Following a significant delay, proceedings were able to continue. However, if Shell expected its remaining shareholders to rally around the company in light of the disruption, it was sorely mistaken. Investor support for the company’s  resolution on Energy Transition Progress, which sought investor approval for its annual ,  to 79.9% this year—down from 88.7% in .

Fortunately for the company, its shareholders were also less impressed with Follow This’ shareholder requisitioned resolution, which this year called on the company to accelerate its energy transition and align its plan with the targets of the 2015 Paris Agreement. The Dutch climate change activist group has tabled a resolution at each of Shell’s AGMs on an annual basis since 2016. Although support reached the new height of 30.5% in 2021, its resolution only managed to garner 20.3% of votes cast in favour at the 2022 AGM, no doubt to the relief of Shell’s executives.

In response to the falling support for both the management and shareholder climate-related resolutions, company CEO, Ben van Beurden, had the following to say:

‘Shareholder support is critical as our business continues to change and we work towards our target to become a Net-Zero Emissions energy business by 2050. We are pleased that the overwhelming majority of shareholders continue to support Shell, our energy transition strategy and the progress we have made in the past 12 months. We are on the right track. We are also encouraged by the reduced support for Shareholder Resolution number 21 but recognise there is still work to do. We will consult shareholders to understand these votes and formally report back to investors within six months.’

As investor opposition against its Energy Transition Progress resolution narrowly crossed the 20% threshold, the resolution will be logged on the Investment Association’s public register of shareholder dissent. In addition, Shell will be required to publish an update statement within six months of its 2022 AGM on the views it has received from shareholders as to why they voted against, as well as the actions taken by the company (if any) to address the concerns of its shareholders.

Speaking on Shell’s 2022 AGM, Alex Cooper, Lawyer in Corporate/Finance and Climate Change at the Commonwealth Climate and Law Initiative said the following:

‘Shell’s shareholders have shown that robust and credible transition plans are a key area of focus for investors. While some investors, such as , have indicated that they are unlikely to support overly-prescriptive shareholder resolutions on this issue (perhaps demonstrated by the decreased support for the shareholder resolution calling for Shell to increase the ambition of its transition plan), the reduction in shareholder support for Shell’s own resolution on its transition progress shows that investors will continue to scrutinise this issue closely and are willing to vote against the board’s recommendation. It’s interesting to watch the interplay between shareholder resolutions and the escalation to strategic litigation, as environmental charity and Shell shareholder ClientEarth specifically Shell investors to vote against Shell’s transition strategy ahead of its proposed action for breach of fiduciary duties against the Shell board. The climate resolutions being voted on at the Chevron and ExxonMobil AGMs, taking place on Wednesday, are likely to be closely watched.’