Norway's $1.6 trillion sovereign wealth fund urged Shell on Friday to give investors more information about its revised climate targets, but said it would not back a call by a group of 27 shareholders for the oil company to strengthen those targets.
The group of shareholders has filed a resolution to be voted on at Shell's annual general meeting (AGM) on May 21.
Norway's wealth fund is the world's biggest investor in equities and Norges Bank Investment Management (NBIM), which operates the fund, is Shell's second largest shareholder with a stake of 3.03%, according to LSEG data.
Shell in March weakened a 2030 carbon reduction target and scrapped a 2035 carbon intensity reduction objective, citing expectations for strong gas demand and uncertainty over the energy transition. The company, however, reaffirmed a plan to cut emissions to net zero by 2050.
"Shell's energy transition strategy has evolved under the new CEO. We nevertheless believe that it sufficiently retains the core components of a Paris-aligned transition plan," the fund said on its website, referring to the 2015 Paris Agreement on tackling climate change.
"We have encouraged Shell to make additional strategy disclosures that could reduce uncertainty about the company's direction in the mid-2030s," it added.
The resolution from the 27 investors, the biggest such drive to date in terms of the size of the participants, is led by activist shareholder Follow This. The investors manage around $4 trillion of assets combined.
The resolution urges Shell to align its medium-term carbon reduction targets with the Paris Agreement, including emissions from fuels burnt by Shell's consumers.
In a notice ahead of the AGM, Shell recommended voting against the resolution, saying it "is against both good governance and shareholders' interests, and also has negative consequences for our customers."
(Reuters - Reporting by Terje Solsvik; Editing by Louise Rasmussen and Mark Potter)