Misalignment Issues – Investors Take Notice The disconnect between the top line climate positions of the oil majors and their policy lobbying stances is noted in the section above. When considering the gap between this top line climate branding and the lobbying positions of their key trade associations, the disconnect is extreme. Moreover, it only continues to widen as the oil majors’ branding becomes more positive while trade group lobbying against climate policy holds firm. This disconnect in combination with the huge power wielded by trade groups wield through their lobbying has attracted growing investor concern. Key institutional investors like pension funds are anxious to eliminate the lobbying blocking climate policy and to drive better corporate governance on climate (i.e. ensuring there is no disconnect between the “walk and the talk” on climate change). A key theme of a shareholder engagement launched by institutional investors with $2Tn in assets in 2018 was the misalignment by European oil majors with their trade associations over climate change (see Financial Times, Investors challenge 55 companies on climate, Oct 2018). Royal Dutch Shell, facing a potential shareholder resolution on the matter, announced in December it would comprehensively assess its lobbying and trade association links. These pressures are likely to increase on all five oil majors, especially as the Climate Action 100+ engagement process proceeds. The following table outlines some glaring recent disconnects between the corporate top line stance and trade group lobbying on climate change. Company Top Line Climate Statements by Company “The next step should be for governments to put in place the right policies […] they should include regulations that speed up investment in low carbon technologies and ― at the same time ― move consumer demand” - Shell CEO, Ben Van Beurden, CERAWeek, March 2017 Contradictory Lobbying by its Trade Group “American Petroleum Institute (API) opposes mandates and subsidies […] the level of market penetration achieved by electric vehicles should not rely on government interference” - API Testimony before the US House of Representatives, May 2018 “We need battery electric vehicles” – Shell CEO, Ben Van Beurden, July 2018 “We’ve been vocal in our support of a carbon tax, and recently joined the procarbon-tax Climate Leadership Council.” Energy and Carbon Report, February 2018 15 InfluenceMap “[a carbon tax would be] bad public policy […] We currently do not support, as a trade association, a carbon tax.” American Fuel and Petrochemical Manufacturers (AFPM) CEO Chet Thompson, March 2019 March 2019