It will also raise its dividend per share by an expected 15%, payable in September, and start share buybacks of at least $5 billion in the second half of the year, the update said.
Shell said it is "making good progress towards its target to become a net-zero emissions energy business by 2050, by reducing emissions from its operations, and from the fuels and other energy products it sells to customers." It plans to invest $10-15 billion between now and 2025 to support the development of low-carbon energy solutions, including biofuels and hydrogen and electric vehicles.
'We will invest in the models that work — those with the highest returns that play to our strengths," said CEO Wael Sawan.
Shell shareholders pushing the company to more aggressively address climate change made modest progress at the company's annual meeting May 23, when 20.19% of shareholders backed a proposal from climate advocacy group Follow This calling for Shell to align an existing 2030 emissions-reduction target to cover its Scope 3 emissions and to align with Paris Agreement goals.
A 20% level of support is considered the minimum for boards to formally respond. In a statement after the meeting, Mr. Sawan said the vote "requires us to explain what actions we intend to take to consult shareholders in order to understand the reasons behind the result, and report back within six months."
Some institutional shareholders, including Border to Coast Pensions Partnership, Leeds, England, a pool of local authority pension funds with £60 billion ($74.5 billion) in combined assets, voted against Shell's energy transition plan out of concern for Shell's inadequate targets and failure to meet the Climate Action 100+ Net Zero Benchmark for aligning capital expenditure with net zero, a Border to Coast spokeswoman said in an email.
Mark van Baal, founder of Follow This, said in a statement Wednesday that Shell's plans are "on a collision course" with the Paris Agreement, and that Shell's pivot back to fossil fuels should be a wake-up call for institutional investors who voted against the shareholder resolution. He noted that as votes on the resolution increased over previous years, Shell advanced climate goals. But when votes decreased to 20% support over the past two years, "it's no surprise that Shell slows down climate action," he said.