Understanding and engaging with our stakeholders
The Board continues to value and recognise the importance of engagement and co-operation with our stakeholders. Time is dedicated to listening to different stakeholder views and our commitment to stakeholder engagement is built upon the understanding that knowledge-sharing, widening of experiences and adopting a learner mindset will help us achieve our commercial, environmental and social objectives.
The Board’s and Shell’s commitment to public collaboration and stakeholder engagement has not wavered despite the challenges in recent years due to COVID-19 restrictions. We remain grateful for the opportunities that we have had, including the 2022 AGM which included physical attendance on a larger scale than since May 2019.
The Directors have continued to consider stakeholders’ views in Board discussions and decision-making, as described in “Section 172(1) Statement”.
Engagement with our stakeholders also goes beyond the Board and is continuous. Our broader businesses regularly engage with stakeholders throughout the year, and in the build-up to or during many Shell projects or activities. This engagement is often governed by formulated policies, control frameworks, regulation and legislation. It may differ by region.
Site visits
The Chair, certain Board committees and Non-executive Directors traditionally visit a number of Shell operations and overseas offices. The visits are designed to provide Directors with:
- first-hand insights into portfolio positions; and
- opportunities to engage directly with stakeholders including employees, partners, communities and NGOs.
In previous years, and as part of the Board evaluation process, the Directors have reflected on the use of site visits for improving the Board’s oversight of risk and concluded that the best way to determine if risks are being properly managed is to visit sites and talk to local management. Similarly, some Directors have used site visits as a way to monitor and assess culture first-hand. Site visits play an important part in the induction process for new Board members and provide good opportunities for Board members to get to know each other better.
Shareholders
The Chair, the Deputy Chair, the Chief Executive Officer, the Chief Financial Officer and the Executive Vice President Investor Relations each meet regularly with major shareholders and report the views of such shareholders to the Board. Committee chairs also seek engagement with shareholders on significant matters related to their areas of responsibility. Over the year and following his appointment as Chair, Sir Andrew Mackenzie met with 77 major shareholders, including at roadshows. A variety of topics were discussed with the Chair including energy transition, available and affordable cleaner energy, capital discipline and allocation, returns on investment, cost and governance and controls. The Remuneration Committee Chair met with 47 shareholders over the course of the year and discussed 2021 pay outcomes and considered Remuneration Committee policy changes ahead of the 2023 AGM .
Shareholders can contact Shell directly via the “Contact us” section of the Shell website. This allows investors’ questions to be directed to the appropriate Shell team that can assist. Shareholders are also able to make use of our automated question response tool. Investors can also access information via the frequently asked questions section of the Shell website.
The Shell website also provides contact details for our registrar, Equiniti, shareholder queries, our media team, requests for copies of the Annual Report, and general customer enquiries.
The Company’s registrar operates an internet access facility for registered shareholders, providing details of their shareholdings. Facilities are also provided for shareholders to lodge proxy appointments electronically. The Corporate Nominee service, facilitated by Equiniti, provides a facility for investors to hold their shares in the Company in paperless form.
Stakeholder engagement on AGM resolution
At the 2022 AGM shareholders voted on two climate related resolutions: (i) Resolution 20, which was an advisory vote on Shell’s Energy Transition Progress – shareholders showed strong endorsement, with 79.91% of shareholders which voted casting votes in favour of our progress; and (ii) Resolution 21, a shareholder resolution, submitted by an organisation called Follow This on behalf of a small group of shareholders, requesting certain actions that the Board believes are not in the best interest of the Company. This resolution received support from 20.29% of shareholders which voted. Shell is aware that some shareholders voted in support of both resolutions, despite their conflicting content.
In 2022, the Chair, Chief Executive Officer and Chief Financial Officer hosted meetings with some of our large shareholders. These meetings covered many topics. Shareholders were asked for specific feedback on dividends, share buybacks, predictability in financial results, energy macro outlook, business activities in Russia, capital discipline, business performance and Powering Progress implementation.
We recognise and value the importance of stakeholder engagement when considering our energy transition progress. The Board is grateful for the time and contribution of all those stakeholders who provided feedback, and for the overall indications of support for Shell’s strategy.
Following the AGM, we engaged with our largest shareholders offering further opportunities to discuss the progress made against Shell’s energy transition strategy and to understand the reasons behind various voting decisions. The Chair subsequently had an opportunity to engage directly with our large institutional shareholders during his roadshow in September 2022.
These discussions showed that our large shareholders, that did not vote in line with the Board recommendation on Resolution 20 and Resolution 21, were predominantly focused on Shell’s energy transition strategy and not the 2021 progress, which is what Resolution 20 related to. Some shareholders indicated that societal pressure, potential media coverage as well as expectations from beneficial owners were reasons for not following the Board’s recommendations. Others raised questions related to medium-term targets including a desire for a Scope 3 absolute emissions target.
This stakeholder feedback was added to the ongoing internal considerations of the Company’s climate targets, along with the outcome of the Dutch court case, the Powering Progress strategy and the commitments that Shell had made within its energy transition strategy.
Engagements in 2022
Information on engagements the Board has held during the year is summarised below. Information on engagement with other stakeholders including the workforce is provided in section “Workforce engagement”. The way in which stakeholder interests were considered in principal decision-making by the Board in 2022 (Section 172 statement) can be found in “Section 172 statement". Further insight into our engagement with stakeholders can be found within our Sustainability Report, scheduled for publication in March 2023.
Remuneration Roadshow – Q1 2022 Engagement
Engagement before event
Engagement was undertaken before the meetings so that the Directors were provided with understanding and insight on particular topics of interest.
Event/activity
In March 2022, Neil Carson, Chair of the Remuneration Committee, presented the 2021 remuneration outcome and 2022 remuneration plans to investors. The presentation included summaries on:
- reflections on the Company’s financial performance, portfolio and launch of the Powering Progress Strategy;
- 2021 pay decisions;
- changes of Directors;
- remuneration for 2022; and
- forward-looking agenda.
Director attendance
Remuneration Committee Chair
Outcome/insight
Shareholders were provided with context and an explanation of the Remuneration Committee deliberations in arriving at the 2021 pay outcomes and setting the pay framework for 2022 and had the opportunity to ask questions and provide feedback.
Remuneration Roadshow – Q4 2022 Engagement
Engagement before event
Engagement was undertaken before the meetings so that the Directors were provided with understanding and insight on particular topics of interest.
Event/activity
In November 2022, Neil Carson, Chair of the Remuneration Committee, presented the 2023 remuneration considerations to investors. The presentation included summaries on:
- the appointment terms for new CFO and CEO;
- ongoing review for 2023 remuneration policy proposals;
- 2022 performance update; and
- a questions and answers session.
Director attendance
Remuneration Committee Chair
Outcome/insight
Shareholders had the opportunity to understand and discuss the Remuneration Committee’s considerations in developing its proposals for the 2023 policy update and provided useful perspective and feedback.
Annual ESG Update 2022
Engagement before event
Discussion with the Chair of the Safety, Environment and Sustainability Committee to ensure that key topics would be covered.
Event/activity
This annual engagement took place in May 2022 in London with investors. It included an update on ESG matters of significance, including Shell’s progress with its targets to become a net-zero emissions business by 2050.
Director attendance
CEO
CFO
Strategy, Sustainability and Corporate Relations Director
Outcome/insight
Any questions requiring follow-up were addressed outside the presentations. In some cases, follow-up meetings were held with stakeholders and the Chair of the Safety, Environment and Sustainability Committee.
Visit to LNG Canada – Safety, Environment and Sustainability Committee engagement with external organisation
Engagement before event
Discussion with the Chair of the Safety, Environment and Sustainability Committee on key topics for inclusion in the visit agenda.
Event/activity
The site visit was focused on safety, environment including climate change, and broader sustainability. The main elements on the visit included a site tour at Kitimat and local community engagements with the Chief of the Haisla Nation and Mayor of Kitimat. In Vancouver, the Committee held further meetings with LNG Canada management and engaged with the Premier of British Columbia and relevant Ministers.
Director attendance
Safety, Environment and Sustainability Committee
Outcome/insight
The Committee was particularly impressed with the major project management activity under way at LNG Canada and the significant work completed to address worker welfare, manage environmental issues and ensure strong community relations. It also noted the strong relationships and trust built with key local and regional stakeholders which have made LNG Canada a wanted project.
Nature-Based Solutions – Safety, Environment and Sustainability Committee engagement with external stakeholders
Engagement before event
Discussion with the Chair of the Safety, Environment and Sustainability Committee to ensure that key topics would be covered.
Event/activity
The purpose of this engagement with two external stakeholder organisations was to assist the Committee in its role of overseeing Shell’s strategy and approach to Nature-Based Solutions (NBS).
Director attendance
Safety, Environment and Sustainability Committee
Outcome/insight
The overarching main message was that credibility remains key to Shell’s success with NBS. Shell should continue to pursue its strategy, execute the strategy well, and be sure to communicate effectively.
2022 AGM
Engagement before event
The Board sought feedback from the investor community and other stakeholder groups prior to the AGM.
Event/activity
This was the first time since the pandemic that large-scale physical attendance had taken place at a General Meeting of the Company since 2019.
Director attendance
Board
Outcome/insight
Support from shareholders for the resolutions proposed by the Board, including the advisory vote on the Shell Energy Transition Strategy progress.
Chair Roadshow
Engagement before event
26 meetings were held between the Chair of the Board and shareholders during 2022.
Event/activity
The dialogue was typically strategic in nature and included ESG topics as well as the energy transition and business outlook.
During the first-quarter roadshow, the discussions predominantly focused on business activities in Russia following the invasion of Ukraine, as well as capital discipline approach.
During the fourth-quarter roadshow, the Chair had an opportunity to engage directly with our large institutional shareholders where capital discipline was discussed.
Director attendance
Chair
Outcome/insight
Provided the Chair with an opportunity to listen to key institutional shareholders as well as providing Board perspective on topics such as governance, energy transition, business and management performance.
The Institutional Investors Group on Climate Change (IIGCC) meetings
Engagement before event
We have a continuing dialogue with this group throughout the year. Moreover, meetings with the IIGCC are held with the CEO, and another with a member of the Executive Committee twice a year as part of our engagement and collaboration with the IIGCC and Climate Action 100+.
Event/activity
In March 2022, the IIGCC members were cordially invited to a bi-annual dialogue between Shell and Climate Action 100+. The meeting was hosted by the CEO, who provided an update on the energy situation in Europe and energy transition progress in Shell.
In August 2022, an Executive Committee member hosted an energy transition visit to our Shell Energy and Chemicals Park Rotterdam. The meeting included several presentations, opportunities to ask questions and a tour around the site.
Director attendance
CEO
Projects & Technology Director
Outcome/insight
The meetings were well attended and gave investors a good insight into both the significant progress and scale of the energy transition in a key asset in our portfolio.
We continue to value and appreciate the collaboration with Climate Action 100+ and their large institutional investor base.
Audit Committee visits
Engagement before event
Engagement prior to the visits helped to formulate the agenda and refine the areas of focus for the respective visits.
Event/activity
In 2022, Audit Committee members visited Shell Recharge Fulham Road and the Audit Committee also conducted a site visit to the London trading floor. Further details are provided in the Audit Committee Report.
Director attendance
Audit Committee
Outcome/insight
The visits provided Committee members with opportunities to engage with a diverse range of the workforce.
Director visits
Engagement before event
Discussions were held with the respective Directors ahead of the visit to formulate the agenda and encourage a natural, open dialogue in the group sessions.
Event/activity
In May 2022, the Chair, two Directors and an Executive Committee member visited the Energy Transition Campus in Amsterdam. The Board received a technology organisation and Portfolio overview and a Digitalisation innovation at Shell session. The Directors then had an informal engagement with select Chief Scientists and Senior Principal Science Experts, followed by lab visits. The visit concluded with a close-out discussion covering the Technology Portfolio pivot towards energy transition.
In December 2022, one Director visited the Energy Transition Campus in Amsterdam.
Director attendance
Directors
Outcome/insight
The Board gained an insight into the development and culture of the operations and maintenance teams. The use and impact of digitalisation tools were highlighted, and the future environmental capabilities of the site were discussed.
