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RLAM abstains on Shell's climate transition plan

16th May 2022

Commenting ahead of Shell’s AGM on Tuesday 17th May, Carlota Garcia-Manas, Head of Engagement at Royal London Asset Management (RLAM), said:

“RLAM has decided to abstain on Shell’s climate transition plan. We acknowledge the considerable progress made in Shell’s climate efforts and the 2021 delivery, however, we cannot fully support the plan as it currently stands.

“In our view, there is not enough certainty in the plan that it aligns with the goals of the Paris agreement and the global necessary efforts to constraint temperature increases to below 1.5 degree Celsius. Our vote reflects RLAM’s upgraded Net Zero engagement strategy, triggered by our commitment to the Net Zero Asset Managers Initiative (NZAMI)(1).

“Shell’s climate plan is heavily reliant on nature-based offsets and divestments. It also includes strategies to continue new oil and gas frontier exploration between now and 2025. We would prefer the company to stop all exploration imminently in line with the most recent IEA(2) and IPCC(3) reports. We will continue our engagement on those topics, as we would like to see more stringent short and medium-term targets that seek to reduce emissions in absolute terms and for all emission scopes, including scope 3(4).

“Our engagement will also focus on the issues within Shell’s climate transition plan that undermine the credibility of their strategy. We have discussed with the company RLAM’s 12 milestones(5) on climate and we were encouraged by the company’s inclusion of the full business value chain in its climate considerations and commend their robust and transparent scorecard for remuneration.”


RLAM holds 0.70% in Shell, worth around £1,206,598,231.

Notes to Editors:

(1) The Net Zero Asset Managers initiative is an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.

(2) IEA – the International Energy Agency, an autonomous intergovernmental organisation providing policy advice to its members states and other major emerging economies to support energy security and advance the clean energy transition.

(3) IPCC – Intergovernmental Panel on Climate Change, is the United Nations body for assessing the science related to climate change

(4) Greenhouse gas emissions are categorised into three groups or 'Scopes' by the most widely-used international accounting tool, the Greenhouse Gas (GHG) Protocol. Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. Scope 3 includes all other indirect emissions that occur in a company’s value chain.

(5) RLAM’s Net Zero engagement framework has 12 milestones, divided into three categories on which we assess and evaluate companies’ climate transition plans. These asks are: to set targets aligned with the 1.5 degrees ambition; bring along the wider economy to Net Zero; and demonstrate climate action now. RLAM’s 2022 Stewardship Report contains greater information about these three asks and how they branch into specific asks for companies.


The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.