What's Happening?
Activist investors, led by the Dutch group Follow This, are preparing to challenge major oil companies like Shell and BP during the 2026 Annual General Meeting (AGM) season. The group, along with 23 institutional
investors managing assets worth 1.5 trillion euros, has co-filed shareholder resolutions demanding that these companies disclose strategies for maintaining shareholder value in scenarios of declining oil and gas demand. This move marks a strategic shift from previous demands for emission reduction targets to focusing on the financial risks associated with the fossil fuel business model. The resolutions are set against a backdrop of oil majors doubling down on hydrocarbons while scaling back green energy investments to boost profits. Follow This founder Mark van Baal emphasized the need for increased shareholder pressure to drive change, noting that financial risks are issues that boards cannot ignore.
Why It's Important?
The actions of Follow This and its allies highlight a growing concern among investors about the long-term viability of fossil fuel companies in a world increasingly focused on climate change mitigation. By shifting the focus to financial sustainability, these resolutions could compel oil majors to reconsider their business models, potentially accelerating the transition to renewable energy sources. This development is significant for the U.S. and global energy markets, as it could influence investment strategies and regulatory policies. The pressure from investors may lead to increased transparency and accountability in how these companies plan to adapt to a future with reduced fossil fuel demand, impacting their profitability and market positioning.
What's Next?
As the AGM season approaches, Shell and BP will need to respond to these resolutions, which could lead to significant discussions among shareholders about the future direction of these companies. The outcome of these meetings may set a precedent for how other oil majors address similar pressures. Additionally, the resolutions could influence policy discussions in the U.S. and Europe, particularly as governments grapple with balancing economic growth and environmental sustainability. The response from Shell and BP, along with the level of shareholder support for the resolutions, will be closely watched by industry analysts and environmental advocates.
