Shell Permits AGM Vote on Follow This Climate Resolution, Unlike BP

• The Follow This resolution calls on Shell to disclose strategy performance under declining fossil fuel demand scenarios, which BP deemed invalid and refused to include on its AGM ballot
• Shell claims the resolution would be 'against good governance' as it would bind the company to scenarios subject to change, despite allowing the shareholder vote to proceed
• BP's blocking of the resolution has drawn criticism from some investors, highlighting different approaches among major oil companies to climate-related shareholder proposals

Summary

Key Development:

Shell will permit shareholders to vote on a climate resolution from activist group Follow This at its upcoming Annual General Meeting (AGM). This contrasts sharply with BP's decision to exclude the same resolution from its AGM agenda, a move that has drawn criticism from major investors.

The Resolution:

Follow This is calling on Shell to disclose how its business strategy would perform under scenarios of declining oil and gas demand. BP rejected the resolution, claiming it was invalid and would be ineffective if passed.

Shell's Position:

While allowing the vote, Shell opposes the resolution, arguing that:

• Its existing disclosures already comprehensively address Follow This's questions
• Current reporting enables shareholders to assess the company's strategy
• Passing the resolution would constitute poor governance by binding Shell to scenarios subject to change

Market Implications:

The divergent approaches by Shell and BP highlight growing tensions between oil majors and climate-focused shareholders. BP's outright rejection has triggered backlash from some investors, potentially creating reputational and governance risks. Shell's decision to allow the vote, despite recommending against it, may be viewed as a more transparent approach to shareholder engagement on climate issues.

This development comes as energy companies face increasing pressure to demonstrate climate resilience and transition planning amid global efforts to reduce carbon emissions. The outcome of Shell's vote could set precedent for how oil and gas companies handle similar shareholder climate proposals.

Date: April 14, 2025 (Reuters, London)