The board of UK energy behemoth Shell’s board is facing a shareholder rebellion as large investors including the nation’s biggest pension scheme prepare to back a climate activist resolution.

A record number of 27 investors have agreed to back a resolution filed by the Dutch shareholder activists at Follow This, which calls for the Shell to align its medium-term emissions reduction targets with the 2015 Paris agreement.

The proposes that Shell sets its medium-term targets for scope three greenhouse gas emissions to be consistent with efforts to limit global warming to 1.5 degrees above pre-industrial levels.

“Continued, targeted investment in oil and gas will remain necessary to meet global energy demand over the coming decades as the world transitions to a lower carbon future,” a Shell spokesperson told Upstream.

“By the end of 2022, the net carbon intensity (NCI) of the energy products sold by Shell — a metric that measures emissions per unit of energy sold (grams of CO₂ equivalent per megajoule) — had fallen by 3.8%, compared with 2016. The majority of this decrease was achieved through emissions avoidance and reduction activities. Our analysis, using data from the International Energy Agency, shows the net carbon intensity of the global energy system fell by around 2% over that same time.”

Shareholders will be asked to vote on the resolution at the company’s annual general meeting in May. The resolution has already received the backing of investors which together hold about €4 trillion ($4.36 trillion) in assets under management, and support is expected to grow over the months before the AGM, according to Mark van Baal, founder of Follow This.

“This escalation of 27 leading investors puts the call for emissions reductions by energy companies front and centre for all institutional investors,” Van Baal was quoted by The Guardian.

The Shell spokesperson added: “We remain committed to constructive engagement with our shareholders, and we believe our climate targets are aligned with the more ambitious goal of the Paris Agreement. In early 2024, we will publish our first Energy Transition Strategy update, on which there will be an advisory vote at our 2024 AGM.

“The 2024 resolution from Follow This is broadly unchanged from their 2023 submission, which was rejected by shareholders (as its variations have been every year since first being submitted in 2016). Shell’s Board has previously advised shareholders that the Follow This resolution was unrealistic and simplistic, that it would have no impact on mitigating climate change, have negative consequences for our customers, and was against the interests of the company and our shareholders.”

Meanwhile, Shell’s appeal against a landmark ruling three years ago that directed the company to reduce its carbon emissions by 45% by the end of the decade will reportedly start in April.

On 26 May 2021 the Hague District Court in the Netherlands ordered Shell to reduce its emissions by 45% by 2030, relative to 2019, across all activities including both its own and end-user emissions, without prescribing how the company should achieve that target.

Shell, which has argued that the court’s decision unfairly singled out the company, will face the Dutch branch of Friends of the Earth in court over four days in the first half of April in a battle to overturn the 2021 ruling, , Bloomberg reported on Wednesday.

Shell said immediately after the 2021 ruling that it would accelerate its carbon emission cuts, but it has directed a larger proportion of its spending to oil and gas since Wael Sawan took over as chief executive a year ago.

The Netherlands branch of Friends of the Earth has reportedly raised €650,000 in donations to fight Shell’s appeal.

Updated to include comment from Shell.