The board of Shell has been sued by an NGO for not having a sufficiently ambitious climate plan, which could damage the value of Shell and the green transition. We support the lawsuit, as it supports our goal of influencing energy companies to convert to green energy and thereby future-proof the customers’ pension investments.
It is crucial to get the most climate-burdening companies to take part in the green transition if society is to succeed in curbing climate change. We want to contribute to this and have a goal that our investments in the energy sector must be concretely reduced by 15 percent towards 2025 and fall further towards 2050.
The English NGO ClientEarth is behind the lawsuit and is itself a shareholder. in Shell. Specifically, they are suing the board for not looking after the shareholders’ and the company’s long-term interests well enough, as the current climate plan is not sufficiently ambitious and may result in the value of Shell falling in the future.
The purpose of the lawsuit is to get the board to create a credible climate strategy that aligns with the goals of the Paris Agreement and can future-proof their business.
Against this background, we have signed a letter supporting ClientEarth’s lawsuit, as it is in line with our ambition to use active ownership to influence energy companies to replace black with green energy.
“ Society must and will move away from fossil energy, and energy companies must prepare for and help drive that transition. We want Shell and other energy companies to stop development of new oil projects in line with the recommendations from the International Energy Agency and continuously increase investments in renewable energy so that they have a relevant business in the future. If they fail to do so, it can hinder the green transition and affect the returns to our customers ,” says Mads Steinmüller, Acting Head of Active Ownership at Danica Pension.
A necessary but dilemma-filled adjustment
We want Shell to lean more into the green transition. They should reassess their climate plan and ensure it complies with the Paris Agreement and improve reporting on it. At the same time, we watch with great seriousness that they start new oil activities, which may be loss-making in the future and contrary to the recommendations of the International Energy Agency. This increases the risk of our investment in Shell, which we want to avoid.
“The restructuring of Shell and the energy sector has many nuances and is full of dilemmas. There must be security of supply for a global society where more than 80 percent are dependent on fossil fuels today and will be so for many years. At the same time, we have a fixed task in freeing ourselves from Putin’s oil and transitioning to a green economy in order to slow down climate change. It is not a straight road and is paved with difficult decisions, but we believe that active ownership is the most effective way to drive Shell towards a greener business that benefits society and our customers, ” says Mads Steinmüller.
As part of our active ownership, we are in ongoing dialogue with Shell and other energy companies, vote on climate proposals at their general meetings and collaborate with other investors through, for example, Climate Action 100+. The goal is to create positive changes and influence energy companies to reduce climate impact and support the green transition.
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