Shell Capital Markets Day 2025

The Australasian Centre for Corporate Responsibility (ACCR) is commenting on the Shell Capital Markets Day.

Shell has:

• restated its ambition to “become the world’s leading integrated gas and LNG business” and announced that it is targeting LNG sales growth of 4-5% per year to 2030
• reduced its capex forecast to $20-22bn per annum through to 2028
• increased shareholder distributions from 30-40% to 40-50% of CFFO
• stated that it is “maintaining its climate targets and ambition” set out in its 2024 Energy Transition Strategy.

Nick Mazan, UK Company Strategy Lead, ACCR, said:

“Shell is doubling down on its commitment to LNG as a central pillar of its strategy, which will do little to ease the concerns of investors who are questioning the Company’s bullish LNG demand outlook.

“Increasing LNG sales will make it harder for the Company to reach its climate commitments, despite restating its commitment to more value with less emissions.

“With LNG being core to the Company’s growth strategy, there is an increasing need for investors to have greater oversight of the assumptions that underpin this strategy. The shareholder resolution that has been filed seeks to enhance this transparency in the interests of long-term shareholders.

“The questions around Shell’s LNG Outlook make the resolution critical as this will give the necessary information to investors to appraise the potential risks related to its bullish strategy.

“Shell is making investments that will still be operating in 25 or more years. This makes it incumbent on the Company to provide information allowing investors to discern whether its investments will deliver value over in the long term.”

Conor Constable, Head of Stewardship, Pensions & Investment Research Consultants Ltd (PIRC), said:

“It remains uncertain whether the company can thread the needle between its climate commitments and the levels of LNG demand it needs to materialise. In light of this, the relevance of a shareholder proposal filed for the company's 2025 AGM is thrown into ever starker relief.”

Background

Shell’s plans to grow its liquefied natural gas (LNG) business are facing scrutiny, following the filing of a shareholder resolution by institutional investors. The resolution asks Shell to justify the assumptions behind its LNG growth strategy and explain how it’s consistent with Shell’s climate commitments.

The resolution was filed by Brunel Pension Partnership, Greater Manchester Pension Fund and Merseyside Pension Fund, which have combined assets under management of US$86 billion. The Australasian Centre for Corporate Responsibility (ACCR) is also a co-filer.

About PIRC

Pensions & Investment Research Consultants Ltd (PIRC) is Europe’s largest independent corporate governance and shareholder advisory consultancy with over 30 years’ experience in providing stewardship and proxy research services to institutional investors on environmental, social and governance issues. PIRC protects and enhances the long-term returns of major investors by promoting the highest corporate standards.

PIRC serve as representatives of Greater Manchester Pension Fund and Merseyside Pension Fund, who recently co-filed a shareholder resolution alongside ACCR on Shell’s LNG strategy.