Shell is set to confront the risk that climate change may pose to its future, after backing a resolution from activist shareholders. The move came on the same day it announced $15bn (£10bn) in cost cutting due to plummeting oil prices and said it wanted to resume drilling for oil in the Arctic.
The resolution, filed by 150 investors who control hundreds of billions of pounds, requires the oil major to test whether its business model is compatible with the pledge by the world’s nations to limit global warming to 2C.
The 2C target means only a quarter of existing, exploitable fossil fuel reserves are burnable, according to a series of recent analyses. That implies trillions of dollars of oil, gas and coal held by investors could become worthless and that continuing exploration for fossil fuels may be pointless.
The resolution, also filed with BP, includes a ban on corporate bonuses for climate-harming activities and a commitment to invest in renewable energy.
“This is a turning point and demonstrates the power of activist strategies to deal with climate change,” said Catherine Howarth, chief executive of ShareAction, which helped coordinate the resolutions.
Damian Carrington | theguardian.com