Shareholders ask Shell to justify how LNG expansion fits within climate ambition

Shell has targets to grow liquefied natural gas (LNG) production and distribution by up to 30% by 2030, but its shareholders want to know how this fits within the oil major’s plans to achieve net zero emissions by mid-century.

A shareholder resolution filed this week seeks to force Shell to disclose how its LNG-related demand forecast, production and sales targets, and new capital expenditure are consistent with its climate commitments, particularly its net zero target.  

The resolution was filed by Brunel Pension Partnership, Greater Manchester Pension Fund, Merseyside Pension Fund and the Australasian Centre for Corporate Responsibility (ACCR) – and is supported by more than 100 individual shareholders including NGO ShareAction. It will be submitted to a vote at Shell’s 2025 annual general meeting.

Vaishnavi Ravishankar, Head of Stewardship at Brunel Pension Partnership, said: “Brunel is deeply concerned about the apparent disconnect between Shell's LNG growth strategy and its stated climate targets and Paris-aligned pathway. We need to see further transparency to assess Shell's alignment with climate goals, particularly in the context of the recent removal of its interim 2035 climate target. We are committed to engaging with Shell to enhance the ambition, transparency, and credibility of its climate transition efforts.”

“In a world transitioning to green energy, the level of fossil gas production planned by Shell is not only environmentally dangerous, but creates financial risk for investors too, as the demand for fossil fuels decreases,” added Jackie Garton, Campaign Manager - Corporate Climate at ShareAction.

Oil majors backtracking on climate commitments

But Shell is not the only oil and gas firm to backtrack on climate ambitions and expand new fossil fuel production. Most other European oil majors cut back on their renewable investments in the past year, with BP spinning off almost all its offshore wind projects and Equinor also announcing reduced wind investment after acquiring a stake in wind power group Orsted.

Read also: What the backtracking of oil and gas climate ambitions means for corporate decarbonisation

Think tanks also believe faltering climate ambitions by the oil and gas sector are slowing down the development of sustainable aviation fuel (SAF), in turn hindering the decarbonisation of the aviation industry.

Shell’s share price drops upon LNG outlook review

Shell’s next AGM in May will reveal the fate of the new resolution, but so far few climate-related shareholder demands have received enough support among fossil fuel investors to be passed.

Last year for example, all four sustainability-related proposals were rejected during ExxonMobil’s AGM – after the oil major started a legal offensive against activist shareholders.

On January 8, Shell actually reduced its estimates for LMG output for the last quarter of 2024 due to fewer cargo deliveries (since LNG is primarily used in shipping): after this announcement, the company’s share price dropped by more than 2%, with investors calling the news “disappointing to the market”.

Read also: Mixed investor messages as oil and gas majors come under fire for lack of climate ambition