Energy giant Shell announced today that it plans to relocate its headquarters to the UK from the Hague as part of a major simplification initiative that the company said will help the company speed up the delivery of its strategy to become a net zero emissions business. Shell has begun implementing its energy transition strategy while facing growing pressure from investors and activists to take more aggressive action to address the emerging shift to clean energy sources.

Among the changes announced by the company today include the elimination of its A/B share structure, which has been in place since 2005, the moving from Dutch tax residency to UK to be in alignment with the company’s country of incorporation, and a name change from Royal Dutch Shell – which has been the name of the company since 1907 – to Shell plc.

Shell’s Chair, Sir Andrew Mackenzie, said:

“At a time of unprecedented change for the industry, it’s even more important that we have an increased ability to accelerate the transition to a lower-carbon global energy system. A simpler structure will enable Shell to speed up the delivery of its Powering Progress strategy, while creating value for our shareholders, customers and wider society.”

The move marks the latest in a series of events indicating growing pressure on the fossil fuel-based energy sector from multiple sources including investors, governments and regulators. Last month, Shell received a letter from activist investor Daniel Loeb’s hedge fund, Third Point LLC, urging the company to break into several standalone businesses, in order to enable a sharper focus on investing in emissions reduction advances and clean energy sources for the emerging businesses, and optimizing cash flow from the legacy businesses.

Shell has been more active on the energy transition front than some energy majors, launching its “Powering Progress” strategy earlier this year, detailing how it will achieve its target to be a net-zero energy business by 2050 across Scope 1, 2 and 3 emissions, including setting short-term and interim targets, and investing in renewable and clean energy solutions. Months after unveiling its plans, however, the company lost a legal battle, with a Dutch court ruling that the company must slash emissions by 45% by 2030. 

Mackenzie said that the move will not affect the Dutch court ruling. While Shell has appealed the ruling, the company also recently introduced absolute emission reduction targets that are more aggressive than those mandated by the court.

The simplification moves will be voted on by shareholders at a general meeting on December 10.

Mackenzie said:

“The simplification will normalise our share structure under the tax and legal jurisdictions of a single country and make us more competitive. As a result, Shell will be better positioned to seize opportunities and play a leading role in the energy transition. Shell’s Board unanimously recommends shareholders vote in favour of the proposed resolution.”

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