Legal & General Investment Management, the U.K.’s largest asset manager, said it wants Shell to explain how it thinks it can still reach net-zero emissions by 2050 while ratcheting up investments in fossil fuels.
Shell said Wednesday it intends to devote an ever larger chunk of annual spending to oil and gas, a strategy that’s been dubbed "catastrophic” by climate activists. Shell says it can still deliver on its pledge to shareholders to eliminate emissions by mid-century, but didn’t say how. At the same time, the company signaled it will restrict spending on renewable energy projects to those it thinks can compete with the returns of its fossil-fuel business.
"There is a sense that oil and gas companies want to keep their options open in case the world misses the net-zero by 2050 deadline,” said Stephen Beer, senior manager for sustainability and responsible investment at LGIM. "In our engagements with Shell, following its recent announcements, we will be assessing how it matches with our expectations.”