Shell PLC (LSE:SHEL, NYSE:SHEL)’s first quarter trading update has sparked a backlash from activist investors and environmentalists over the oil major’s carbon emissions.
Shell reported an adjusted US$7.7 billion (£6.2 billion) profit for the first three months of the year on Thursday, driven by oil and gas sales.
Fossil fuels generated US$7.5 billion over the quarter, against US$163 million from renewables.
Having scaled back climate targets last year, the oil giant faces calls at this month’s annual general meeting to reinstate tougher targets in line with the Paris Agreement.
Activist investor Follow This has put forward a resolution for Shell’s May 21 meeting to align medium-term targets with the agreement’s 1.5C global temperature limit.
Amundi, Axa IM and Scottish Widows have backed the calls, with the activist groups collectively holding 5% of Shell’s issued shares.
The groups have previously argued Shell’s marketing budget outstrips its spending on renewables, while environmentalists also pointed out higher payouts for shareholders.
“For every £1 Shell spent on renewables in the last quarter, they spent £11 transferring excess cash to shareholders,” thinktank the Institute for Public Policy Research said.
Shell unveiled a new US$3.5 billion share buyback alongside Thursday’s results, due to be completed by August.
Chief financial officer Sinead Gorman has called on shareholders to reject the Follow This resolution, citing plans to reduce downstream emissions from Shell’s products to 483 million tonnes by 2030, against 517 million last year.
“By doing so, our shareholders will be endorsing [...] Shell’s aim of being THE investment case through the energy transition,” she said.
However, at 483 million tonnes, Shell’s 2030 target would still exceed the UK economy’s entire current emissions by 150 million tonnes.