Climate activist shareholder group pushes BP, Shell on plans for declining oil demand

The group Follow This, a climate activist shareholder group, and more than?20 investors filed resolutions on Wednesday asking BP and Shell how they would create value if the global demand for gas and oil declined. The resolutions are a strategic change on the part the Dutch activist group. In April, it announced that it had been forced to stop its campaign to get major oil and gas producers to commit to emissions reductions due to a lack investor interest.

Follow This filed climate resolutions during shareholder meetings starting in 2016. It received peak shareholder votes of 80% in the following years at Phillips 66 and 60% at Chevron.

The group 'will focus on demanding BP and Shell reveal longer-term strategies in scenarios of declining 'oil and gas consumption, the group'said.

Companies are scaling back their renewable energy pledges

Together with other producers, both companies have reduced their renewable energy commitments in order to concentrate investment on oil and natural gas projects.

The resolutions ask BP and Shell for reports that cover at least 10 year spans, detailing capital expenditures, production plans and free cashflow projections, under declining demand scenarios. This includes from the International Energy Agency. Shell's spokesperson stated that "as with?anything? that meets the requirements of the procedure, the Board will review it and make a recommendation in the Notice of Meeting of the AGM" (Annual General Meeting). Shell's annual general meeting will be held in mid-May. BP didn't immediately reply to a comment request.

Achmea Investment Management, Ethos Foundation and a number European local pension funds are among the investors who co-filed resolutions. They manage assets worth about 1,5 trillion euros (1,75 trillion dollars). In November, the IEA predicted that oil demand would peak in 2030. This is based on a scenario which takes into account policies that have been proposed but not necessarily implemented.

The IEA, however, predicted that the global oil and natural gas demand would grow up to 2050 under a scenario based on current government policies, excluding any aspirations for climate goals. This was a departure from earlier expectations.

(source: Reuters)