Royal Dutch Shell will hold its Annual General Meeting (AGM) tomorrow in The Hague, Netherlands. The Anglo-Dutch company has taken positive steps in the past year that distinguish it from other major fossil fuel producers. But Shell still supports groups that try to deceive the public and policy makers about global warming and block action to reduce carbon emissions. Tomorrow is a critical opportunity for the company to distance itself from climate deception.
In response to pressure from UCS and others, Shell last year announced that it would leave the American Legislative Exchange Council (ALEC), a US-based lobbying group that peddles disinformation about climate science and tries to roll back clean energy polices. The company said that ALEC’s stance on climate change “is clearly inconsistent with [its] own.”
This move set Shell apart from its fossil fuel industry peers Chevron and ExxonMobil, which remain members of ALEC. At their annual meetings this week, both companies face shareholder resolutions calling for full disclosure of their direct and indirect lobbying—and highlighting the lack of transparency around their membership in ALEC as part of the rationale for improved disclosure. More on that in a future post.
Disclosing climate risk
Last year, Shell supported a shareholder resolution filed by the “Aiming for A” investor coalition that called for annual reporting on issues such as emissions management, asset portfolio resilience in a carbon-constrained world, low-carbon energy research and development, and public policy positions on climate change. With management recommending support, nearly 99% of shareholders voted in favor of the resolution.
In contrast, Chevron and ExxonMobil are recommending that shareholders vote against similar resolutions this year. More on that soon, too.
Two-degree scenario mapping
In another positive step, this month Shell outlined what it believes will be required for the world to avoid 2°C of global warming. It is good to see the company seriously considering future emissions scenarios and acknowledging the Paris Agreement as “a constructive milestone.” Shell’s scenarios for reaching net-zero emissions before 2100 rely on the most optimistic “Goldilocks” pathway—meaning, presumably, that policies and technologies have to be “just right.” Yet Shell’s vision apparently includes nothing more than lip service support for a price on carbon and no major changes to its investment portfolio; rather than committing to invest seriously in technologies such as carbon capture and storage, is the company arguing that taxpayers should foot the bill?
Investing in low-carbon energy
Meanwhile, Shell has recently set up a separate division, New Energies, to invest in renewable and low-carbon power. The new division has $1.7 billion in capital investment attached to it through Shell’s existing hydrogen, biofuels, and electrical activities, and will be a platform for new investments in wind power. It remains to be seen whether Shell will redirect spending from oil and gas—including carbon-intensive sources like the Canadian tar sands—to New Energies, which would help demonstrate its commitment to meeting the Paris Agreement emissions targets.
Still supporting climate deception
Despite these positive steps, Shell remains a member of the American Petroleum Institute (API), the leading oil industry association, and the Western States Petroleum Association (WSPA), the top lobbyist for the oil industry in the western U.S.
API continues to claim that the science of climate change is unsettled and tries to block efforts to limit carbon pollution, such as the Environmental Protection Agency’s Clean Power Plan. UCS’s Climate Deception Dossiers featured a now-notorious internal strategy memo written by API in 1998—a roadmap of the fossil fuel industry’s plan to cast doubt on the public’s understanding of climate science.
WSPA serves as a key organizer of opposition to California’s groundbreaking climate policies and employed deceptive ads on more than one occasion to block the “half the oil” provisions of a major clean energy bill enacted by California lawmakers. Last month, I blogged about BP’s continued membership in WSPA on the eve of that company’s AGM. In response to a question from a shareholder at the AGM about WSPA’s tactics in California, BP said “of course we did not support that particular campaign.”
Shell could make a similar statement tomorrow. There are, to be sure, many reasons unrelated to climate change that companies are members of trade associations. Short of leaving API and WSPA, Shell should publicly condemn their climate deception, distance itself from campaigns that misalign with its climate positions, and use its leverage within these trade associations to stop them from spreading disinformation on climate science and policy.
As I prepare to attend the ExxonMobil annual shareholders’ meeting in Dallas, Texas, on Wednesday, I will be watching Shell’s AGM from afar, looking for signals that the company is ready to make a break from climate deception.