Majors are demanding a strategic mandate as climate pressure recedes

After a series of shareholder meetings scheduled for 2024 in which Western oil companies demanded a clear mandate for their increasingly cautious transition strategies, they received scant support for calls to accelerate decarbonization. Among polls conducted – including advisory votes on transformation strategies provided by the companies themselves – opposition was overwhelmingly above 20%, and no major US or European leaders experienced the ignominy of outright rejection of their plan, as seen in Australian independent Woodside. Activist investor group Follow This, which has actively submitted proposals in previous years, won 18.6% of the vote at Shell’s general meeting, where it called for the adoption of medium-term emissions reduction targets agreed with Paris. The figure fell from 20.2% in 2023, but support for Shell’s internal resolution on the transition strategy also fell from 80% to 78% in the first vote since March, since the strategy was updated, with major headliners withdrawing dozens of transition targets last year . TotalEnergys’ climate progress also saw lower support – less than 80% compared to almost 89% last year – while less than 70% supported Repsol’s transition strategy, with 20.6% against and 9.7% abstaining. That’s down from 83% support in the last poll two years ago, and Repsol has since relaxed its renewable energy target for 2030. “The question is whether (support) has fallen because investors want more green investments or because that they want more oil and gas,” said one climate-minded Repsol shareholder.

The scale of opposition is not minor, but remains low enough for major companies to claim they have the support of their largest shareholders. It may also strengthen the arguments of some investors – such as activist Bluebell Capital and his company call for a shock at BP — that companies should focus more on oil and gas extraction and return profits to investors, rather than investing in transformation. “Approving shareholders are a vocal minority, but 20% is a manageable level that allows management to continue with its strategy.” Kim Fustier, director of European oil and gas research at HSBC, said in a note. According to Follow This founder Mark van Baal, Shell’s result was still a clear revolt by a group of investors that mainstream investors “cannot continue to ignore.” He noted that about 20% of the rebellion is more than the combined holdings of key institutional investors Shell, BlackRock, Vanguard, State Street and Norges Bank Investment Management (NBIM). Bluebell investment office co-founder Giuseppe Bivona told Energy Intelligence that his call for BP to cut low-carbon investments and boost profits is not a condemnation of the energy transition, but an argument that the British company is not well-positioned to compete with incumbent utilities in areas such as renewable energy.

Time will tell how investors who want major companies to move more quickly away from fossil fuels will react now. If strategic resolutions are blocked or ineffective, climate-focused funds may move more decisively towards voting against board members and executive remuneration, or disengage altogether and divest. Less than 76 percent Total number of shareholder votes supported the reappointment of CEO Patrick Pouyanne to the board, which may indicate a backlash against management after Resolution of the Ethos Foundation has been blocked. However, a campaign to vote against Exxon Mobil executives after the US major took legal action to stop the resolution on Follow This fell flat, gaining at most 13% support. CEO Darren Woods interpreted the numbers as a message from investors that “principles and value creation matter” and confidence that Exxon is “on the right track.” Meanwhile, environmental activists could redouble their efforts to disrupt meetings rather than attend them. Both BP and Total moved their shareholder meetings from public places to their own offices this year as exchanges with environmental activists become increasingly confrontational. Repsol’s general meeting witnessed Josu CEO Jon Imaz’s violent attack on Greenpeace. The environmental group’s proposal presented at Equinor’s general meeting, calling for an increase in the number of transformation and sustainability experts on the Norwegian company’s board, received only 3.2% support, which was always a difficult task. But even if they stop trying to convince oil companies to change course, environmentalists won’t give up their cause; they came from as far as Argentina, Canada and Australia to speak in Stavanger. “None of us will leave,” Scottish activist Lauren MacDonald told Equinor’s management board when it decided to continue the controversial Rosebank field in the British North Sea. “Wherever you go, we will mobilize against you.”