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Shell defeats activist uprising as it faces down rising climate concerns

Jillian Ambrose

Royal Dutch Shell has convincingly defeated a climate activist uprising after facing down one of its most bitter stand-offs with shareholders over its climate goals.

Around 94pc of shareholders voted down a special resolution calling for the oil giant to set and publish annual targets to reduce carbon emissions at its AGM in the Hague on Tuesday. The board also survived a vote on executive pay which was backed by 93pc of shareholders.

But anger over the group’s focus on fossil fuels dominated the meeting, underlining the mounting pressure facing oil majors to address public concern.

Shell boss Ben Van Beurden used much of his opening address to assure shareholders that it is taking action to reduce its carbon intensity.

“I thought I’d better address these issues upfront,” he said. Mr Van Beurden and Shell’s chairman Charles Holliday then went on to field a deluge of shareholder questions over the role the company will play in adhering to the Paris Climate agreement.

“I would like to stress that we get it. We understand what needs to happen. We understand the role we need to play,” Mr Van Beurden said.

Mr Holliday added that the board will be taking account of fresh forecasts which predict a boom in electric vehicles that threatens to throw oil demand projections into disarray and leave high-cost oil assets stranded.

Mr Van Beurden pledged to slash carbon intensity in half by 2025 by  increasing its offerings of lower carbon fuels. In addition, half its retail profits will come from  “anything but fuel” as Shell transforms its service stations to become “retail destinations”.

He also outlined plans to pursue advanced biofuels, hydrogen fuels as well as opportunities in renewable power and electric vehicle charging.

But he was clear that Shell would not pursue low carbon projects which “do not closely fit” with its core competencies.

“I hope you respect and understand that every part of the economy needs to play to its strengths,” he said.

Instead he called on Governments to push for clear carbon pricing policies and support for carbon capture and storage technologies, which can dramatically reduce carbon emissions from thermal power plants.

Shell’s 2016 takeover of liquefied natural gas (LNG) leader BG Group is part of its strategy to shift away from oil towards gas, which has roughly half the carbon intensity.

The embattled oil boss rubbished shareholder concern that renewable energy sources may “leapfrog” gas in the transition to a low carbon power system.

He said gas will still be used “decades in the future”. Demand for gas is increasing at double the rate of oil , and demand for LNG is growing at double the rate of pipeline gas, he said.

“The energy system by the end of the century will still need gas,” he said.

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