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Is Shell about to Leave ALEC?

2nd June 2015 | Opening for shareholder engagement as pressure grows over membership of climate denier lobby group

Following the recent Hague AGM and London shareholders’ briefing that saw sustained questioning over Shell’s membership of the powerful US conservative lobby group the American Legislative Exchange Council (ALEC), Shell CEO Ben van Beurden dropped a large hint to in a Guardian interview that the situation is under review.


According to the Guardian: ‘The Shell boss justified the company’s continued involvement in climate denial lobby groups such as the American Legislative Exchange Council on the grounds that the company supported other aspects of its work. But he also signalled that Shell may withdraw its support by letting its membership lapse, saying they should “watch this space.’”


Fellow UK based energy company BP pulled out in March this year continuing the movement of some large corporates to drop their membership from the group whose position on climate issues is that of denial. ALEC does not accept IPCC findings and consistently opposes any carbon pricing, regulatory or legislative measures to reduce emissions, state and national policies that support the uptake of clean energy or climate action initiatives.


Shell has a public stance that is seriously at variance to these positions. Board Chair Ollila and CEO van Beurden on behalf of the Board were emphatic on the companies pro climate action and carbon pricing views at both The Hague and London meetings.


Shell has also faced long term criticism over its ties with ALEC from the Union of Concerned Scientists who have amassed more than 130,000 signatories calling on the company to resign its membership.


The company’s own External Review Committee (ERC) in reviewing the 2014 Sustainability Report has this to say on the matter:


“Although the dilemmas faced by the company around whether to remain in some industry bodies are described, the ERC does not find this aspect of the report adequately convincing, especially given that Shell remains in associations perceived by many to be blocking climate change action.”


Shell has also announced its participation in a new industry body of EU oil and gas majors formed to develop a joint strategy on climate change policy in the face of climate politics, shareholder action and divestment campaigns.


Following the success of the Strategic Resiliency 2035 climate risk resolution at the annual meeting, van Beurden’s comments are a welcome signal to investors that Shell may back words with deeds and disassociate the company from ALEC.


For the UK and US shareholder groups active around the recent AGM vote, some more positive engagement and direct advocacy to bring this decision forward may be in order.

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