How activist investors plan to take on Big Oil at the 2026 AGM season

Core Viewpoint - The Dutch group Follow This is launching a revised strategy to increase shareholder pressure on the financial sustainability of fossil fuel business models, particularly targeting major oil companies like Shell and BP during the upcoming proxy season [1][2]. Group 1: Strategy and Focus - Follow This aims to shift its focus from requesting emission reduction targets to highlighting the financial risks associated with declining oil and gas demand [2][3]. - The group has co-filed new shareholder resolutions for the Annual General Meetings of Shell and BP, requesting disclosures on strategies for creating shareholder value amid falling oil and gas demand [3][11]. Group 2: Investor Support and Concerns - Follow This has partnered with 23 institutional investors managing €1.5 trillion ($1.75 trillion) in assets to bolster its resolutions [3]. - Support for climate-related resolutions has plateaued at around 20% in recent years, partly due to legal risk concerns, especially in the U.S. [6]. Group 3: Company Responses and Market Dynamics - Shell and BP have recently scaled back their green energy investments, focusing instead on their core hydrocarbon businesses [14][17]. - Shell plans to become a net-zero company by 2050, while BP has also committed to this goal but has faced scrutiny over its strategy amid declining oil and gas demand projections [11][17]. Group 4: Future Projections and Strategic Changes - Analysts project a significant decline in oil and gas demand, which raises concerns about BP's current growth assumptions in its strategy [17]. - BP has announced plans to reach $20 billion in divestments by the end of 2027, including a recent $6 billion sale of a 65% stake in its lubricants business [18].