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Shell plc’s SHEL ambitions to lead the global gas and liquefied natural gas (LNG) market have encountered resistance from a significant portion of its shareholders. At its recent annual general meeting (AGM), over 20% of investors backed a resolution calling for greater transparency around the company’s gas-heavy strategy, citing concerns about climate commitments and long-term economic risk.
Shell is betting heavily on gas in anticipation of a 60% global increase in demand through 2040, primarily from Asian markets. Based on the bolstered demand predictions, the company plans to grow its annual LNG sales by 4-5% until 2030, and increase the annual top-line production in its integrated gas business by 1%.
Shareholder Concerns: Risks and Transparency Gaps
The resolution, filed by three U.K. local authority pension funds and the Australasian Centre for Corporate Responsibility, urged Shell to clarify how its aggressive gas investments align with climate goals. Critics argue that Shell’s exposure to LNG outpaces industry peers, and that projected demand from Asia may fall short if cheaper alternatives or stricter global emissions regulations emerge. They also added that shareholders lack sufficient data to evaluate the risks associated with Shell’s gas-heavy strategy.
In accordance with the U.K. listing rules, companies are obliged to explain how they will tackle shareholder concerns if they receive a shareholder opposition of more than 20%. Therefore, in this case, Shell will have to meet the shareholders’ concerns and provide a proper explanation.
SHEL Defends its Role in Energy Transition
Shell’s CEO, Wael Sawan, defended the company’s approach, asserting that gas plays a vital role in displacing more polluting fuels like coal and heavy oil. He pointed to gas —the largest contributor to lowering CO2 emissions —as a practical enabler of the energy transition, especially as renewables scale up.
Sawan also argued that LNG infrastructure is essential to support renewable energy by stabilizing electricity grids, citing recent blackouts in Spain as a cautionary example. He affirmed that Shell remains committed to reducing its emissions footprint through carbon capture and storage initiatives.
What’s Next: Shareholder Consultations Ahead
The 20.56% protest vote requires Shell to engage directly with shareholders and provide an official response within six months. The company acknowledged that the protest was consistent with past climate-related dissent and promised a detailed “summary note” ahead of the next AGM.