Shell’s LNG strategy under scrutiny as institutional investors file shareholder resolution

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 and UK-based responsible investment NGO, ShareAction, supported the filing along with more than 100 individual shareholders.

Shell plans to grow its LNG business by an expected 20-30% by 2030, with LNG projected to account for nearly one-third of the company’s upstream hydrocarbon production by the end of the decade.

Investors are seeking greater transparency around how Shell arrives at the levels of demand in its LNG Outlook because:

• Shell has more uncontracted LNG than any other independent oil and gas company, making it highly exposed to value erosion should prices be lower than planned for.
• Shell’s LNG growth strategy is built on an anticipated level of demand higher than every scenario put out by the International Energy Agency (IEA) and appears to have misinterpreted independent analysis in substantiating its demand projections.
• Shell's LNG demand outlook has not been materially revised in response to major changes in the global energy market.

Investors require additional information to better assess the material risks associated with the company’s LNG portfolio and how it is managing those risks.
The resolution has been submitted to Shell for its annual general meeting in May 2025.

The resolution and supporting statement can be viewed here.

ACCR research: Shell’s LNG strategy: Overcooked?

Vaishnavi Ravishankar, Head of Stewardship, 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.”

Spokesperson, Great Manchester Pension Fund, said:

“As an active owner, we want to ensure that the strategies of energy companies are aligned with reducing carbon emissions, can be realistically achieved, and ultimately protect shareholder value. As such, when putting forward an LNG demand outlook that is more than 300% above the IEA’s 1.5-degree scenario, the onus is on Shell to explain how this position can be considered credible in the context of the company’s existing climate commitments.”

Owen Thorne, Responsible Investment Manager, Merseyside Pension Fund, said:

“We are in the midst of a rapid energy transition creating material risks to the business models of existing oil and gas majors. Given the direction of travel, investors urgently require enhanced disclosure to reconcile the high demand forecasts set out by Shell with the fundamentals of energy markets and the views put forward by independent energy forecasters.”

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

“Investors are looking at Shell’s LNG demand outlook which predicts a massive uptick in demand for fossil gas on the one hand, and at Shell’s commitments to the goals of the Paris Agreement on the other hand. It is unclear how and whether the company intends to make these pieces fit.

“It is incumbent on Shell to explain to investors why it is building a strategy around huge growth in LNG demand from the very countries where the uptake of affordable renewables is surging.

“Shell is more financially exposed to LNG than any other independent oil and gas company and presumes investors should trust it unreservedly when it cites substantial future LNG demand growth. This resolution encourages Shell to be transparent about its LNG growth assumptions so that investors can be assured the company is allocating their capital responsibly.

“The bullish position of Shell and other oil and gas companies on LNG demand is high on the agenda for investors, who are not able to reconcile these high forecasts with the fundamentals of energy markets, nor with the view put forward by independent energy forecasters.”

Simon Rawson, Deputy CEO at ShareAction, said:

“More than 100 individuals have joined the institutional investors to make this shareholder resolution possible because they share a deep concern that Shell’s climate plans are not consistent with the Paris Agreement to limit global warming. They want to see fossil fuel companies take responsibility for their huge impact on climate by making credible plans before it’s too late.”

Background

About Brunel

Brunel Pension Partnership is a UK-based Local Government Pension Scheme (LGPS) pool that consolidates the investments of ten like-minded funds, collectively managing approximately £35 billion in assets.

About Greater Manchester Pension Fund

Greater Manchester Pension Fund is the largest LGPS fund in the UK, managing over 30 billion pounds on behalf of approximately 400,000 members.

About Merseyside Pension Fund

Merseyside Pension Fund manages over 10 billion pounds on behalf of 153,000 active, deferred and pensioner members of the Local Government Pension Scheme (LGPS).

About ShareAction

ShareAction is an NGO working to shape a world where the financial system serves our planet and its people. We mobilise global investors to use their influence to drive up labour standards, tackle climate change, protect the natural world, and improve people’s health. We push policymakers to ensure the financial system is working in the best interests of society. We work with people to create a movement for change. Visit shareaction.org or follow us @ShareAction to find out more.