Shell plc (LON:SHEL)

AGM 2017

← View all transcripts

May 23, 2017

Good morning. Good morning. I'm Chad Holliday from Shell. And on behalf of all my colleagues in Shell, we send our sincere thoughts to the people of Manchester this morning who have experienced such a tragedy overnight. Our prayers and support go out to everyone impacted by this terrible event. Would you please join me in a moment of silence in honor of the people? We will now start into our program and I am delighted each of you could be here this morning for the annual meeting of Royal Dutch Shell. Before I go any further, I'd like to say a few words about health, safety in our venue today. First, as you see, anything you consider to be unsafe or have concerns about, please bring it to the attention of what our uniformed security staff you can see in around the hall. 2nd, should there be any need to evacuate the building, an announcement will be made across the system, the speaker system in the room about leaving by the nearest exit. Please take a moment to observe the exit nearest to you at this point. You'll then be directed to an assembly point and then given further instructions from that point. Let me start by introducing your Board and saying a few words about the non executive directors and their qualities to serve on the Board. First, Ben Van Durden, our Chief Executive Officer Jessica Auel, our Chief Financial Officer. Jessica, welcome to your first AGM as a Board member. And Linda Symansky, our Company Secretary. Linda, welcome to your first AGM as our Company Secretary. Hans Weyers, our Deputy Chair and Senior Independent Non Executive Director, Chair of the Corporate and Social Responsibility Committee and member of the Nomination Committee. Hans has been a Non Executive Director since 2,009 and has a broad range of business, economic and political experience having served as Minister of Economic Affairs here in the Netherlands and Chief Executive Officer and Chairman of OXXO Nobel. On the role behind me, starting from my right to left, Sir Nigel Shinewall from the UK, a member of the Corporate and Social Responsibility Committee and effective tomorrow, a member of the Remuneration Committee. Sir Nigel is a former senior British diplomat who served as ambassador to the U. S. Prior to this, he served as a foreign policy and defense advisor to the U. K. Prime Cabinet Office on Defense and Overseas Secretariat. He also served as British Ambassador to the permanent representative to European Union in Brussels. Linda Stuntz from the U. S, a member of the Audit Committee and member of the Nomination and Succession Committee. Linda is a founding partner of a law firm in Washington, D. C. Her practice includes energy, environmental regulation, as well as matters relating to government support for technology development. She served as Deputy Secretary of U. S. Department of Energy and played a principal role in developing and enacting the U. S. 1992 Energy Policy Act. Harriet Zalm, a member of the Audit Committee and member of the Enumeration Committee, Herr has a strong breadth of financial and investment and political experience from his former service as Minister of Finance here in Netherlands and Chairman of the Managing Board of ABN AMRO. Yulin Goh from Singapore, Chair of the Audit Committee. Yulin is a chartered accountant and has qualifications in banking and taxation. She held various senior management positions at Standard Charter Bank and was Chief Executive Officer of Standard Chartered Bank Singapore. Harritt Claschterly, Chairman of the Remuneration Committee and Member of the Audit Committee. Howard has previously served as CEO of Phillips and a member of the Supervisory Board of Dahmer and a member of the Board of Dell. He currently serves as the Chair of Vodafone Group. And finally, Guy Elliott from the UK, a member of both the Corporate Social Responsibility Committee and the Nomination and Succession Committee, Guy joined the Board in 2010 and has a wealth of financial investment experience serving as Chief Financial Officer Rio Tinto until 2013. He also served as a Non Executive Director of Cadbury. Patricia Wirtz, who's been a Non Executive Director since 2014 stands down from the Board today at the close of this meeting. Unfortunately, Pat could not join us for this session. As you may have read in the notice of the meeting, we have arranged for this meeting to be webcast. We welcome all those that are joining us via the web in this session today. In accordance with the company's articles and association, as stated in the notes of the meeting, the meeting will be held in English. However, there will be Dutch translation facilities available. If you need a headset, please ask for assistance from any of the ushers in the room. With that introduction, I now declare the Annual General Meeting formally open and suggest with your permission the notice of meeting will be taken as written. With that introduction, we will have 2 presentations. I'll start off with a review of the company then turn it over to Ben. We'll work from the standard because we'll be using some slides. 1st slide. In just a few minutes, back up one slide. In just a few minutes, Ben will describe our 2016 performance and the path forward of our company. He'll hit the highlights that we think are very critical for you to know as a shareholder. I'm pleased to tell you today that the Board is very proud of the accomplishments of our management team and all the men and women of Shell during 2016 including the BG acquisition. I will focus my comments today on the Shell strategy and how we're navigating that strategy in a highly dynamic external environment and what's critical to us in accomplishing that. What we know for a successful strategy is Board and management must be fully aligned and I can assure you today that they are fully aligned on the strategy. Moving on to the next slide. The cautionary note. Now you've had plenty of time to read that. But I do take note it is important and please consider all of our public information as you're making decisions about our company. Next slide. Energy is the golden thread that connects economic growth, social equity and environmental sustainability. A beautiful statement by the former Secretary General of the United Nations that could have been written by an outstanding speechwriter. But knowing the Secretary General who grew up in Korea without access to electricity like we have in this room and hearing him personally tell the stories of studying at night by candlelight and he wouldn't have a candle every night, only when there was exam the next day, he was sure to have candle. This was a statement written by someone that knows the importance of elect energy to a developing world. As we're here today with 1,100,000,000 people without access to electricity as we know it and 2,400,000,000 cooking on a stove that will probably reduce the quality of our life, we're in a very different age. And it's in the context of this statement, we must navigate our strategy at Shell. To be successful in that environment, you must have the ability to question. Next slide. As Ben described, we must not cling to our old beliefs, but be willing to question to tackle the energy challenge ahead. Ben made this statement. He's made similar statements many times and this was particularly an Appounding Progress Together session in June of last year in London. But this is what's necessary if a company is going to tackle the challenge that the Secretary General gave to all of us is being willing to challenge all beliefs. If you come away with nothing else from this meeting, I hope you come away with a conclusion, Shell is open to challenging old beliefs, because we know it's critical. Next slide. The energy challenge. Four points are described here that speak to what we must do to create that golden thread the Secretary General described. But let me make it very simple for you. Between now and 2,060, we have to increase the energy supply by about 60% in the world. That's because the population is going to go from 7,400,000,000 to over 10,000,000,000 dollars But also each one of us will be requiring more energy, 60% increase. While at the same time, we need to drastically reduce our greenhouse gas emissions toward net 0 if we're to meet the goals the nations of the world set forth in Paris. That doesn't mean we'll have no greenhouse gases, but it does mean we'll find ways to capture and store or sequester them in nature as we go forward. That is one of the major challenges the world's ever faced to somehow meet the increasing needs of everyone for energy, while we significantly reduce the greenhouse effect. With that background is out standing, let's move to the next slide, which is the Shell strategy. The big hexagon on this chart, world class investment case. Ben and his team described this to the world at the Investor Day last year. It is the hallmark of what we must do. And you say, well, why is that the biggest? Because if we aren't financially stable, if we're vibrant, we will not have the resources to meet the other things we think are so critical as a company. We must have the free cash flow. We must have the returns on investment so we can return a good dividend to you and return on what you're doing. We are not a full world class investment yet, but that is the goal. Ben will talk more about this morning. It's critical we get there in the near future to accomplish everything we must have to lead this energy challenge. We will be a leader externally moving to the other hexagon not only in value that we create for society, but influence. You must conduct yourself the right way to have a right to have influence And we must have that financial stability to be considered in the world. Yet we can't only say what others should do. We have to improve our own carbon intensity. And we're very much focused on that as one of the four pillars of our strategy. So for energy unit produced, we have to find ways to reduce our carbon intensity totally. Shared value with society. If you recall back what the Secretary General said, it must be social equity. If we can't find ways to share value with society broadly as we accomplish the objective, we will not be the world class company we plan to be. Next slide. We communicate extensively about what we're doing in the company. I point to these particularly two reports. 1 is our sustainability report we've now issued for 20 consecutive years as long as any company we track and having a sustainability report. And we urge you to look at that report. It's very easy to follow. It's online. It's simple. And I think it will tell you a lot about what we're doing as a company. And as you see things you think we should add to that report tell us because it's constantly changing and improving to meet your needs. The other report is available outside. I'm holding a copy up here. These are examples of what we're doing for a cleaner energy world, we're doing today. This is one example we will have many to come out, but I think it's important to look at the concrete examples of things we're doing as we move forward to make the world a better place. Next slide. September 27, 2015, a Sunday, New York City, United Nations Building, 193 countries coming together to agree on 17 Sustainable Development Goals for the next 15 years. It's very difficult to get 193 countries to agree on anything. This was a very important step. If you'll stand across those, it describes part of the challenge we in Shell and all of us face together as collective society to move forward together. The goal is to complete each one of these issues or make substantial progress by 2,030. And that's what we must work on as a company. If you look at our sustainability report, we will give you progress on most of these that we've had across the company. But let me turn to the next slide and give you an update on just 4. Number 7, affordable and clean energy for all. Of course, many, many people in Shell work on this every day of the week. But I'd like to talk about one new program we just started this year. It's a Kickstarter Innovation Program. And we now have people making submissions from 12 different countries where they have ideas to get access to energy to that 1,100,000,000 people that don't have it today. We're sorting through those and we're finding the best way Shell could help, not to be a part of Shell, but to provide investment, to buy coaching, to buy counseling, divide mentors to make it a success. It's a very new program with us and we'll have the first one up and running before the end of the year. Number 8, decent work and economic growth. It's so important for social equity. It's so important for the backbone of the world. For over 35 years, Shell has had what we call a LiveWire program, where we have facilities, we help people develop businesses. And last year alone, over 3,000 people were impacted by something from this 35 year old program inside Shell. Number 11, sustainable cities. By 2,050, 2 thirds of us in the world will be living in cities. If we don't get the cities right, we will not achieve the sustainable development goals we need as a world. Shell shares our planning expertise with many cities around the world, particularly exactly on this chart, the city in India, where we're helping them convert from coal facilities to power the textile industry in that city to a combination of solar and gas fired in a mini grid. This is just one example of what we're doing today to move the energy effort forward. And finally, number 13, climate change. Shell fully supports the Paris Accord and we'll do our part to support this implementation. One example of our part is our carbon capture and sequestration facility in Canada where last year we captured 1,000,000 tons in our 1st year of operation. Next slide. We're still developing our role in the energy transition. But I want to stress to you, we are not waiting to move down that path. 20 years ago, if you'd looked at this first picture and said, Shell LNG out to fuel trucks on the roads here in the Netherlands, you probably would have thought it was impossible. But now through a terminal in Rotterdam, we're filling trucks throughout Northwest Europe and we're also serving the marine industry. Next year, the very first oil tanker in the world will be powered by LNG from Shell. In the following year, 2 ships from Carnival Cruise Lines will be powered by LNG and the largest carrier of the pleasure craft in the world. These are steps people thought would not be happen. They're happening today in Shell Gas, Shell LNG is an important part of those steps forward. The middle picture is from Whoopertal, Germany, where we're filling out a fleet of filling stations with our partners in Germany over the next several years. So hydrogen can fuel the cars. As I saw this, it brought back a real clear memory. 20 years ago, on the streets of Washington, D. C, I had the honor to drive Toyota's experimental hydrogen fuel cell car. I'll never forget, I was very nervous, I was doing it. There was a police car in front and a police car in back just to make sure I was okay. As I looked at that vehicle at that point in time and all the technical hurdles, it would have to come over. I would not have guessed now 20 years later that car would be sitting outside this building. And I've also outdriven 1 in the State of California, I didn't have to have police cars around me. Another way to power your electric car is through hydrogen. And Shell is starting with experiments here in the Netherlands and also in California and obviously Japan is making big steps in that direction. The important thing is that we start down this road. We're not predicting that hydrogen will take over, but it is one alternative that we must consider as we move forward. And last, biofuels and R and D in general. At our Ryzen facility in Brazil, we're now using the waste from the sugarcane to make fuel for automobiles. We have 2 prototype facilities in the United States around using waste products there that don't have other practical uses. And particularly in this example on the picture is a biofuels facility prototype in India and Bangalore where we take garbage and run it through our plant and can put it directly into your fuel tank. These are prototypes, but there are steps in the right direction to move us forward. Let me wrap up on the next chart. Picture yourself a student. She's in her early 20s. She's just graduated from university. And we make a proposition for you. Think about where you want to spend your career. What about in a company that's dedicated to energy solutions in a world that has to have a 60% increase in energy, while at the same time we must make drastic reductions in greenhouse gases. Can you think of a more exciting career starting here today to be a part of that journey with a company that will question old beliefs and find the right solutions. As well as we and Shell can sell that story to those new graduates and we attract them and they decide to vest their career with Shell, we will deliver on what we described for you today. Thank you very much. Ben, over to you. Thanks very well. Thanks very much, Chad. Ladies and gentlemen, welcome also from me. As Chad has mentioned, we set out our strategy quite clearly last year at our Capital Markets Day to reshape Shell to become a world class investment case. But as Chad also said, we want Shell to be a leader to reduce our carbon intensity and we want to contribute to shared value for society. And we need to succeed in each of these areas if we indeed want to deliver on that world class investment case. Now following the completion of the BG deal in 2016 and the subsequent integration of BG into Shell, which we completed in 2016, our recent results are showing that that strategy to become a world class investment case is beginning to pay off. I think we are making good progress in reshaping the company towards this goal with a focus on delivering higher returns on capital employed and a higher free cash flow per share. And of course, free cash flow is that amount of the cash flow statement where the dividend is being paid from. And of course, we need to reduce debt. So the strategy that we outlined in 2016, I believe, is working. And following the successful integration of PG, we are pushing ahead to also transform Shell rapidly at all layers through a consistent and a disciplined execution of our strategy. I think we are firmly on track to deliver on our 2020 expectations that we set out at our Capital Markets Day last year. And of course 2016 was a bit of a transition year, but 2017 will be the year in which we follow through on delivery. And again, this is not just about managing the down cycle in the difficult period that the industry is in. This is about transforming the company through reshaping the portfolio and a structural change in our culture and in our ways of working. We want Shell ultimately to be a more competitive and a resilient company throughout the cycle. Now one thing that hasn't changed is the priorities for cash. First of all, reducing debt, then paying dividends, followed by a balance between capital investment and share buybacks and at least US25 $1,000,000,000 of buybacks in the period of 2017 to 2020. That's of course subject to debt reduction and some recovery still in oil prices. And we are pulling on some really powerful financial levers to manage our overall financial framework within the company. So we continue to reshape Shell's portfolio to transform the company with some 20 $1,000,000,000 of divestments already completed or announced and that will strengthen of course the balance sheet as these divestments are completed. Another lever, our capital investment program, we will manage this capital investment program in the range of 25 to US30 $1,000,000,000 per year. And for 2017, this includes investing around US25 $1,000,000,000 And we continue to reduce our operating costs. And of course, very importantly, we also continue to focus on the delivery of new projects that are still in the final stages of execution. And we expect that about $10,000,000,000 of additional cash flow from operations will be added by the end of next year compared to where we were in 2014. And most of the $10,000,000,000 of additional cash is yet to come. Now of course, our financial framework is a key element of our overall strategy. In our last quarterly results, which were reported a little bit earlier this month, we delivered and sustained the cash flow momentum that you have seen in the previous two quarters, so 3 very strong quarters in a row. If you look at cash flow from operations over a 4 quarter rolling basis that was altogether some US29 $1,000,000,000 And if you exclude working capital movements, so the valuation of our stocks etcetera because of oil price fluctuations then the underlying cash flow from operations was around US34 $1,000,000,000 Let's talk a little bit about health, safety and environment. On this slide, you will see some of the metrics that we monitor. And in this slide included are also the BG assets from the 1st February 2016. And I hope you will agree with me that in the main we are on a path of continuous improvement in our metrics. So we are quite positive about the progress that we are making, but we are absolutely not complacent in this area. There is still room for improvement before we can say with certainty that we have achieved our goal 0 of no harm and no leaks. Of course, we also have sustainable development metrics that we focus, some of them actually also in our annual scorecards on safety and on environment. And in 2017, the bonus scorecard for all employees in the company has been updated to also include the environmental metrics to include greenhouse gas management metrics as well. Let's move to some important areas. 1st of all, natural gas in the Netherlands. As you all know, NAM, the Nederland Sarta de Maerskope is a joint venture with Exxon and we partner with that venture also with the Dutch government. And of course, although Nam is an independent venture, Shell fully understands that the whole earthquake situation that we currently have in Groningen presents a very significant concern for local communities in Groningen. NAM is working very hard to ensure that there is safe gas production. They are striving to deliver on their promises and to fulfill the key commitments that have been made to the residents of the region. And there is increased understanding of the situation and none will continue to study how seismic risks can be developed and in the longer term to reduce the uncertainties in the future. And Shell fully supports NAM in that effort and it also supports the National Coordinator Groningen to make progress in what will be a multi annual program to manage this very important case. Let's move to flaring performance. In 2016, the company achieved a 35% reduction in flaring in our Integrated Gas and Upstream businesses where most of the operational flaring takes place. So the start up of some gas capture facilities in Iraq, for instance, and in Malaysia which happened towards the end of 2016 were major contributions to that 35% reduction. But also in Nigeria, varying intensity levels in SBDC, they decreased also with 35% in 2016 compared to the year before. That was partly due to improvements in assets, but frankly speaking also because of production outages that we have because of the challenging security situation there. We have made progress on a number of gas gathering projects in Nigeria, but I should also say that the planned start up dates that we had for 2 gas gathering projects in Nigeria, they have continued to be delayed because of security issues in the delta throughout 2016, but also these are joint venture projects because of lack of funding of our government partner for most of the year. These projects have been under construction since 2012. Let's move to the shareholder resolutions, which I'm sure you will be having questions on as well. In 2015, the Board supported the Aiming for A resolution and Shell continues to progress the work in this area. Last year, you will remember, we had a resolution from FollowThis, which asked us to become a renewables energy company. And this year, Folodius has submitted another resolution, Resolution No. 21. And I will come back to that resolution in a bit more detail later in this AGM. But what I would like to do at this stage is provide a little bit more context when it comes to these resolutions and to climate change in general. So I hope you will bear with me as I talk you through how we see the energy transition. But before I do that, let me say again that our company, your company is a very strong supporter of the Paris Agreement. We believe it's the right way forward to coordinate a global response that is needed to limit global warming to less than 2 degrees centigrade. Paris is a major step forward. First of all, it clearly sets a goal to reach both in terms of emissions and also a limit to warming, but it also bound countries together in a process of national contributions towards that common aim of reducing global emissions. But at the same time, the work is not done. We have to realize that this is only the beginning of what will remain a very and extremely complex and ambitious journey. And designing and implementing the policies that can deliver these ambitions is a significant challenge for the entire world. And let me explain that a little bit further. So part of the challenge is dealing with all sources of greenhouse gas emissions. And this is not just a fossil fuel story. It's also not just an electricity story. So this chart here gives a breakdown of the world's greenhouse gas emissions in 2015. The pie chart on the left is the breakdown of emission sources. So total emissions in 2015 was 52 gigajons. So that's kiloton. So that's 52,000,000,000 tons of greenhouse gases, mostly methane. Now out of this 52,000,000,000 tons, a quarter was related to land use change, agriculture and livestock, clearing lands, cows, lambs who emit greenhouse gases, whether you like it or not. Another 7% of these 52 gigatons of emissions was related to industries such as cement. So when you make cement and concrete, CO2 gets emitted. So building a house means that or building a concrete bridge actually produces greenhouse gases. Altogether, that's about 7% of the total emissions. So that leaves about 68% of these greenhouse gas emissions that are related to energy. And around 2 5ths of that energy section is actually related to electricity. So that's altogether a quarter of the total greenhouse gas emissions in 2015 came from electricity generation. That's the orange section in this pie chart. And then a further 17%, so less than a 5th of these total emissions actually came from cars, transportation, shipping, planes, etcetera. Now in order to keep global warming to well below 2 degrees Celsius, the world needs to stop adding to the stock of greenhouse gases in the atmosphere. And the Paris Agreement says this should happen during the second half of the century. And at the same time, as Chad says, the world will see its population grow from 7,400,000,000 people today to nearly 10,000,000,000 people by 2,050. And this population growth will take place at the same time as the UN Sustainable Development Goals that Jed mentioned are progressively being met hopefully. That's an achievement that is raising the standards of living. But even without the UN goals being met, people will seek better lives anyway and rightly so. And that will increase global energy demand as well. So this population growth together with the rising living standards is likely to cause the consumption of primary energy, primary energy, so oil, gas, coal, nuclear, hydro, renewables, etcetera, to double by the end of the century. And of course, at the same time, while we are talking about energy now for a moment, remember there's also non energy emissions. So more people with better standards will eat more, will eat more meat and therefore also the agricultural part of greenhouse gas emissions is to rise consistently with that rise in population and the rise in living standards. And with the right policy framework, a world which has ceased adding greenhouse gas to the atmosphere could become a reality. Even though this sounds quite daunting, it could become a reality. This is what we mean by a net 0 emissions world. And this chart here shows how such a world would source its energy needs. So again, bear in mind, this is a world that has a much larger energy system. You see the pie chart growing from 2015 to the net zero energy world that we are talking about later in the century. But it has nevertheless stopped adding to the atmospheric stock of emissions. And it's worth noting that electricity in this world is largely generated from solar, from wind and nuclear. And a very significant part of the transport system will has turned to electricity or to hydrogen. But there remains an important role for fossil fuels as well, particularly for oil and gas. Fossil fuels in this net zero world will continue to be used in those sectors where there is actually no medium term prospect of decarbonization. So think of aviation, think of shipping, think of metallurgical processes that require carbon in order to make steel, nickel and other metals. The chemical industry that actually produces materials where we may have high temperature heat in order to do chemical conversions. These are the sort of areas that at the moment and for some foreseeable time only hydrocarbons can do the job. And therefore, in this net zero world, we will still have about 20 gigatons of greenhouse gas emissions potentially. So we will have roughly doubled the energy system, but we will have reduced the greenhouse gas emissions from 52 gigatons to 20 gigatons. That's the challenge that we have. But then what about the 20 gigatons? How are we going to deal with that? Well, 1st of all, we have to deal with it. This is after all a world in which we want to have net 0 emissions. So how is this going to be done? Now first of all, some of that carbon that sits in that 20 gigatons that I mentioned is just going to be ending up in materials that we use every day like bitumen on the road, like cell phones in your pockets, plastic items that we have in your homes, these electric cars that we will be driving and solar panels. These all contain carbon that's still part of the 20 gigatons that need to be produced. But secondly, we will need to have carbon capture and storage to extract the CO2 from the industrial and the power generation facilities and then store it on the ground. So the CO2 emissions that cannot be avoided. We will have to capture them and store them. As Chad already mentioned, we have one of those facilities in Canada. This technology is proven. It works. It has stored 1,000,000 tons last year and it will continue to do so. But this needs to grow very significantly in years to come. There is no hope we can live in a world with less than 2 degrees C temperature rise without extremely large scale adoption of carbon capture and storage. And of course, we can also have nature do the work for us. We will have to rely and we will have to design systems where natural forests and other biotops will store and capture and store CO2 from emissions. And finally, this net zero world needs to combine nature's ability to take CO2 from the atmosphere and combine it with CCS. So this means you grow plants for biomass, use that biomass to generate energy and make products and then capture the CO2 and store it. So net net, this means that we take CO2 out of the air and store it underground. That's negative emissions. Now I hope you will agree if I change this picture that achieving this net zero world that I just described is a major challenge for society and it will require what I think is an unprecedented level of collaboration in all aspects of society, government, general society, NGOs and indeed industry. The the same challenge needs to be repeated in all other parts of the world as well, who are quite often much less advanced in technology, in adoption, in economic, in prosperity, etcetera, etcetera. This is not just for us. This is for the world. And of course, that includes also a role for us in Shell. But also bear in mind that this task that I just described is just too big for any single entity and certainly single company to take on. Now, so far I've set out what is the context. I thought it was important to do that and thank you for bearing with me on it. I told you what the world needs to do. I've shown you potential routes in very sort of high level terms. Now I want to talk about what Shell can do in this space. First of all, and I know that many of you will be expecting that and asking us to do so as well, we can help grow the share of renewables in the power generation mix. We are doing this already by developing projects such as the Boschule Wind Farm here in the Netherlands, but we're also doing this by developing renewable power markets through our trading arm like for instance we are doing in the United States of America. We are the largest renewable power trader in the United States, enabling the growth of renewables in that country. Currently, coal is still the fastest growing fuel for power. It's also a very carbon intensive fuel of course. Our natural gas produces half the amount of CO2 when you make power from it. And therefore we can play a role by providing strong cost competitive supply of natural gas to help enable that shift away from coal towards lower carbon power generation. And of course, we're also helping to open up new gas markets around the world in areas like shipping, freight in general. So we are helping countries shifting from coal to a lower carbon variety, natural gas. And of course, we should also help industry, not at least ourselves, to reduce the emissions, focusing on efficiency in our refineries, efficiency in our chemical plants. And from this year onwards, which I already said, we will have greenhouse gas management as an element of our remuneration in our scorecard for all our staff. But we should do more. We should advocate. And we are encouraging governments to put a price on carbon, so that the power sector and consumers and all other industry members are further incentivized to improve energy efficiency and reduce carbon emissions. And a government led carbon pricing mechanism, if it indeed resulted in a material price on carbon, would also increase the number of projects to capture and store carbon emissions on the ground. And whether you like it or not, the reality is without strong financial incentives, industry in general will simply not compelled to move as fast as society needs them to move. So that's why we are advocating for a price on carbon. But we're also working with governments in a more detailed and closed up fashion to develop the right policy metrics to develop to reduce emissions from transport and from residential sectors. So this requires regulation on how to make cars and appliances and buildings, but also consumer behavior. Unfortunately, also your behavior and my behavior more carbon efficient. Very difficult things to achieve, but nevertheless things that are very necessary and where I think we can also play a role. We use our trading arm to help build a market that can match the remaining emissions with those who can capture and store them because without an active emissions trading market, the commercial levers to realize net zero emissions will simply not be there to function. So I think altogether and these are just a handful of things and I can go into it a lot more detail, but I won't have the time for it now. There's a lot that we and our company can do, will do and are doing to move the world along to this path of decarbonization. But we can't do everything. We cannot do it single handedly. So let's go a little bit deeper and take out a few businesses and show you what else we are doing. So first of all, it's a very important thing to note that we want the company to be resilient. We want to have a business strategy that will allow us to navigate the energy transition successfully and indeed come out as a winner. Our strategy reflects the acceleration of our growth in gas, of course, after the completion of the PG deal. And as we look how the world could implement the goals of the Paris Agreement, we see that resilience in our strategy. And our strategy to become a world class investment case means continuing to focus on advantaged assets at the lower end of the cost curve at the lower end of the carbon curve. Now let me deepen that resilience argument a bit and zoom in on a few of the businesses to just bring this to life a little bit more. With our very large scale integrated gas business, so our liquefied natural gas business mainly and our ability to develop new markets for gas, we are very well positioned to help governments secure a lower carbon cleaner energy system. Again, as I said before, gas emits less CO2 compared to coal. And also there are benefits, of course, when you consider air quality. Look at some pictures from China and India where indeed coal firing provides for very, very poor air quality. Take Chemicals, another business in our portfolio, actually one of our growth priorities. Chemicals is the fastest growing hydrocarbon demand sector at this point in time, has annual demand growth of 3.7% over the last 10 years. That means that it doubles every 10 years in terms of size as a sector. And why is it? It is because the key drivers for growth in chemicals are very fundamental. It's again increased population, rising standards of living, urbanization, etcetera and these will continue. According to a study that has been done by the International Council of Chemical Associations, the biggest opportunities to reduce carbon dioxide emissions over the lifetime of a product are in areas such as insulation, high quality packaging materials, synthetic textiles, automotive plastics, lightweighting material, low temperature washing powders, etcetera, etcetera. And many petrochemical products will play a role in that set of examples. And a large majority of Shell's petrochemical output actually comprises ethylene based products such as styrene and higher olefins that may not mean very much to you if you're not in chemistry a little bit, but these are products that are being used in making insulation material styrene for instance and higher olefins sits in the low temperature washing detergent that you use at home, significant reductions in greenhouse gas emissions from residential sectors. But of course, on top of it, we reduce our greenhouse gas intensity in our chemical plants. The energy transition also gives us opportunities to change our business models, to do things differently or to make money in a different way. And one of the areas is marketing or retail. You're all familiar with our retail stations around the world. By this year or last year, we set some really strong ambitions for what we want to achieve by 2025. They're on this chart. They're clear in my mind. They're both and the retail leadership team is working hard to implement them. So by 2025, our ambition is that 50% of the margin share in our retail business will come from anything but fuels from our general retail offering. We plan to do this by making our gasoline stations a retail destination, increasing the share of products that we sell beyond fuel and especially at spending our food and drink product offering, increasingly partnering up of course with high quality brands across the world. Secondly, we want to take a leadership position on cleaner fuels and we aim to significantly increase the amount of low emission fuels that we offer to our customers around the world. We want to reduce the carbon intensity of operations. So we aim to achieve this through low CO2 design, low CO2 equipment and operations as well as embedding a low carbon mindset in our retail organization. And our 4th ambition is about innovation to ensure that every customer feels like a guest when they interact with Shell, whether it is at the Shell station, at the Shell app or online. And lastly, reducing waste. It's a very important global social cause we have in retail. We have an extraordinary opportunity to make a significant impact on our people, our communities and our business by leveraging our presence in more than 43,000 retail locations worldwide. So these are some examples of what we are doing in retail. But elsewhere in our Oapress business, for example, we have been high grading refining footprint again to make it a better higher quality lower carbon emitting footprint over a number of years. As you've also seen, our refresh strategy saw us introduce New Energies as a strategic theme. New Energies is a longer term business where Shell looks to invest in a measured way to gain insights as to where we see the potential for material businesses in time. So it's not driven by investment targets or by volumes and it will be aligned with our world class investment case ambition that I mentioned so often before. And in this new energy business, we have 4 emerging themes: advanced biofuels, where we aspire to build a very material biofuels business, manufacturing and blending and also focusing on de risking and developing our technology portfolio for biofuels. 2nd, hydrogen, Ched already mentioned it. We are developing some early options to competitively position Shell for this emerging fuel. We've been doing it for 20 years, so it can be a bit too early in these areas as well. And our initial focus on hydrogen is a mobility in the core markets of Europe and North America. And here we do it in partnership with a number of other players like car companies, industrial gas companies and governments to address market adoption. We are building, 3rd one, an integrated position in the growing renewable power value chain. So this ranges from exploring opportunities in offshore winds and solar and emerging markets, but also selective energy storage and conversion of energy together with partners that we operate in renewable power generation. And we are extending of course our power trading and marketing footprint to leverage these integration systems. And of course we are exploring things like electric vehicle charging opportunities to enable load balancing on the grid and to save money for customers. And that also ties into the 4th theme here, which is customer solutions. So we are testing new customer service models through both business incubation, venture capital investment, focusing on mobility services, B2B services and what we call behind the meter solutions for renewable power and heat. And this strategic theme is one of the areas where we focus very much on the longer term. That was a long expose on what we are doing in climate change, but I had the impression that we were going to get some questions on it. So I thought I better address a few points here upfront. But let me finish with another very important part, which is our strong track record on dividends. And the dividends of course are the company's main road to return cash to you, our shareholders. So in 2016, we paid a quarterly dividend of $0.47 per share. That's $1.88 in total per share in the year. That's an annualized figure of around 15,000,000,000 dollars of dividend declared. We recently announced our quarter 1 dividend per share also to be $0.47 in line with the same quarter last year. So all of this I hope underlines a very strong commitment to our dividend track record. Thank you very much, ladies and gentlemen. I hand over to Chad. Thank you very much, Ben. Very helpful. We've now come to that part of the meeting where we have the opportunity to ask questions or make comments. You may have seen the notice of meeting or in the leaflet that we are handed when you came in today, there are 21 resolutions for you to consider. Most of them are mainly a routine nature for a listed PLC. However, we have a resolution submitted by a group of shareholders, which we'll come to later. To ensure orderly discussion, please ask your questions when the appropriate resolution is called. For example, if you have a question on remuneration, please ask it around Resolution 2 or 3. Likewise, if you have any questions around the shareholder resolution itself, please raise those questions around Resolution 21. For all the questions and comments of a general and operational nature, including those on climate change or renewable energy, I invite you to raise those when we consider the first resolution concerning the annual report of accounts. Additionally, I want to ask my fellow directors from time to time to help me answer the questions, but if you could direct your questions to me as the chair of the meeting, and I will call on them appropriately. Voting will take place at the end of the meeting using the white paper poll card, which you're where if you're entitled to vote you received at registration. You will be asked to deposit the signed poll card in any one of the ballot boxes located at the exit to the auditorium. The votes will be counted by the company registrar, Equium, and I will formally appoint them to act as the sectionaries of today's meeting. If you wish to answer a question, please go to 1 of the designated question points. If you need assistance, please ask 1 of the ushers to give you a hand. To allow as many shareholders and proxies to speak as possible, I'll keep the meeting to a reasonable length. I would ask questions and comments be as brief as possible and relevant to today's meeting. If I believe your questions excessively long, I may ask you to close. I intend where possible to all questions or comments of a similar nature be grouped together. So as a means like Resolution 1, for example, all the questions and comments around dividends will be taken together. I think this will make for a more efficient meeting as we move forward. As Chair of the meeting, I have a duty to ensure today's proceedings are conducted in a proper and orderly manner, and I will do my utmost to ensure all views are given a fair hearing. To help me fulfill these responsibilities, I would ask you respect these procedures. Now before we begin the questions, some of you may have seen recent media reports into Shell's involvement in oil prospecting license 245 in Nigeria. Given this matter is under investigation, you'll appreciate that I will not make comments on specifics and regret that we cannot answer questions on this today. However, I would like to make 3 points. First, while the focus of recent media coverage on the 2011 settlement, It did not focus on the history leading up to that settlement. At the socially responsible Investor Day Shell had 24 April, our Legal Director provided a summary of the facts and events spanning more than 10 years relating to Shell's investment in this settlement. This material is on our website. You can see it on the slide behind me, which is open to everyone. The summary captures a series of complex transactions and disputes over 10 years among multiple parties including the Nigerian government and Malibu Oil and Gas. These disputes were exasperated by the fact that Nigerian government had ultimately awarded OPL-two forty five to 2 different parties, a Shell subsidiary and Malibu. These competing legal claims are central to the disputes that followed into the 2011 settlement. I hope this information helps clarify why certain Shell Companies entered into the 20 11th settlement and why based on our review of the prosecutor of Milan's file and all the information and facts available to Shell, we do not believe there is a basis to prosecute Shell. Furthermore, we are not aware of any evidence to support a case against any former or current Shell employee. Secondly, I want you to know we are taking this matter very seriously and are cooperating with the relevant authorities. This includes the appropriate having shared our key findings of an investigation conducted by Denilos and Plimpton, an international law firm. We have also accurately reported on OPL-two forty five in all of our annual reports. Finally, I want to emphasize that Shell attaches the greatest importance to business integrity. It's one of the core values and central tenets of the business principles that govern how we do business. Thank you for your understanding on this. And with that, I'd like to proceed to Resolution number 1. Resolution number 1 is ordinary resolution concerning the 2016 report and accounts. The purpose of the report to directors and accounts of the company at year end December 31, 2016, be received. A full unqualified auditors report and set of pages 104 to 114 of the annual report are available for you. We're now open to take questions on Resolution number 1, and we'll start with microphone number 1. If you could introduce yourself, please. Thank you, Mr. Chairman. My name is Matt Crossman. I'm the Steward Chief Director at Rathbone Investment Management. Personally, can I just thank you for your introduction of the meeting as somebody who was born and raised in Manchester? I very much appreciate your kind words at the start. I'm here today representing a coalition of investors under the sort of banner of the IIGCC, the Institutional Investors Group on Climate Change. And I've got a short statement to read and then a question, if I may. This statement is supported by the following members: that's Kenton Asset Management Nordea, BMO Global Asset Management Rafflin Greenmac Investments CCLA, HSBC, AXA Investment Management, BNP Paribas, Hermes, Legal and General Investment Management, The Pensions Trust and finally, the taxes asset management. We're supported generally by some of our Dutch members in general with this engagement, but they're choosing to do their own thing as and around the special resolution. So Mr. Chairman, as long term institutional investors who manage retirement savings and investments for millions of people, climate change is one of the biggest systemic risks that we face. Any gaps, weaknesses or delays in climate change policies and responses by companies will increase these risks to our investments. And at the 2015 AGM, over 98% of our shareholders backed calls for enhanced reporting from our company on the risk that climate change poses to the business. And it's the opinion of many that this successful resolution provides sufficient framework for the company to provide more robust evidence of its efforts to address the effects of climate change on our company. The 2015 resolution binds company to providing more information on ongoing operational emissions management, and we know that there's broad agreement that setting public targets is a useful and practical step in embedding sustainability within the business. And this is something reflected in the recently updated IRGC expectations of oil and gas companies. And we note that BG, in fact, had an operational emissions target prior to the merger. This is something that investors like to see in terms of helping us understand risk. We're very encouraged by moves from the board this year to begin to integrate GHG regression goals within the remuneration framework. However, we would encourage a clearer commitment to establish these goals as group wide targets. We'd further welcome any move by the board to set a clearer time line for expanding the scope of these GHG targets in the remuneration scorecard beyond the current level of 60% of Shell's operations. So bearing these factors in mind, Mr. Chairman, the institutional investors here are voting various different ways on the resolution. But for the current business, we note that emerging new opportunities around energy may play a more material role in the future and appreciate the company's building up capabilities in this area through the new energies division, but we're asking for greater clarity on a level of the company's ambition in this area. And I'm moving to my question. Mr. Chairman, in this context, we're asking that the company continue to work with the IIGCC to develop a robust response to the operational emissions part of the 2015 resolution. Page 2 regards to the elements of Resolution 21, which have merit, namely emissions around scope 12. So will the board, therefore, commit to setting a public group wide emissions target on scope 12 emissions and also clarify how it takes account of Scope 3 emissions and ensuring that its strategy is sufficiently flexible to adjust to low carbon scenarios. Thank you. Thank you very much for your statement and question. Ben, would you like to address the question? Thank you very much, Mr. Grossman, and thank you for your support. I think and again, I will make the point more generally. I would like to stress that we get it. We understand what needs to happen. We understand that we have a role to play in reducing greenhouse gas emissions also in our own facilities and reducing our footprint. We have made that very clear also through the introduction of metrics in our scorecard. The reason why we have taken refineries, petrochemical plants and flaring, which adds up to about 60% of our total Scope 1 emissions, is because it's relatively straightforward to set targets for them. We can look around at other refineries. We can benchmark. We can say what is best in class. And that's where we aim to be. It's a little bit more difficult for the rest of our portfolio, but quite often there are no easy comparisons to come up with sort of sensible targets. That's why we limited initially to just this. Of course, we will see how we can increase the scope of our total emissions to introduce into that framework of target setting. But we had to start somewhere. And this, we felt, was the best way to do it. And to attach a very significant part of the total bonus spot of all employees to it, 10%, not insignificant, means that everybody focuses a little bit more on this than they would otherwise already be doing. So yes, there is a commitment to continue to drive that better. Where we have always had more reluctance is to somehow in that very complicated set of assets and considerations that we have to boil it all down to the single number target. We believe there is more risk for unintended consequences, unintended consequences that actually are adverse. But effectively push back on having a single target with unintended consequences doesn't mean that we are against Paris, against climate change, against taking the right measures in our portfolio. We just want to be thoughtful and intellectually honest. And that's our approach. Now that may be requiring a little bit more dialogue with our investors and other members of the community to understand or to make sure that everybody understands what we are doing. And we are committed to that as well. We are committed to have an ongoing dialogue to show how we can demonstrate that actually we are making progress without reducing the whole complexity of the decision down to a single number management, which ultimately we think will have negative consequences not just for the company, but probably also for the energy system as a whole. Just a very brief follow-up, if I may. You mentioned in your comments your support for sorry, my head was making noise. Your support for the Paris agreement. Can we expect to see an update of your scenario work with the oceans and mountains level scenarios that you've produced in the past to reflect the framework of the Paris agreement? I don't think we have plans to update and publish the scenarios as we currently have the oceans and mountains. What I can say about scenario approach is it's very much a live topic at the moment because we're also working with the FSB task force on climate related disclosures, to understand how we can demonstrate that our portfolio is resilient in a variety of worlds that can come about as the world tackles climate change. So what we do here, which is very much in line with the thinking of the task force, is we develop a number of scenarios. We don't know how the world will develop, but we do know how the world could develop under different scenarios if we are to meet the Paris goals of 2 Degrees C. And these scenarios we use to then test the decision frameworks to our portfolios to understand whether we have weaknesses in our portfolio that may become stranded assets or to understand what are the right decisions to take as we make our investments. Now whether or not we will disclose this scenario recommend and how we can best seem to be responding to it. Thank you. Backflow number 2, identify yourself and your question, please. Good morning, ladies and gentlemen. My name is Robert Tracon. From We Connect, you were Public Affairs and Investor Relations. 2 or 3 years ago, I was very glad to see the new CEO, Benson Burton, because communication entered Shell, things became more transparent and also the first step has been made. I then advised you to become the worldwide market leader in the field of solar, wind, hydrogen, water supply, which is very important and are also LEV light electric vehicles because those are very important for urban development. Currently, the cost related to wind and solar is already lower than gas extraction and oil. And obviously, this has a huge impact on follow-up steps. The first steps have therefore been made. Now it's important for this to grow exponentially. I have recommended some leading Dutch innovations to you asking you to upscale them. Well, things are not moving that faster. You have, for instance, given the shell award to a seat heating system, although this saves 95% on CO2 exhaust. And also, the Netherlands have a possibility of saving 95% on gas and water using a very economic system, which is great because in most countries where you work, major water problems may be solved. Then we have EVs, light electric vehicles. In most cities, this is supposed to be the solution combined with spin off systems. For instance, we have electric bikes. 80% of all rides is less than 8 kilometers and therefore on longer strikes, an electric bike is the solution, hardly any energy consumption. And then we have the bureaus little cards, a full tank only costs €1,000,000 and the energy cost is €0.01 per kilometer. This allows you to save 75% on parking space and therefore 75% of the costs in cities. And then we have something else, which is really important, cybercrime. We all see that things are absolutely not well arranged worldwide, maybe with Shell, but certainly not with governments. And we have an additional challenge coming up, which is the Internet of Things, which is even less well protected. And many facilities will be facing the Internet of Things to a certain degree. And my question is the following. How are you going to manage this? What is Shell going to do this to make keep things in order worldwide? And that covers my questions. Thank you. Dan? Thank you, Mr. Klaiken. If you don't mind, I will give the reply in English also for the benefit of everybody listening in on the Internet. I think the points you make are very relevant, very pleasing. Thank you very much for your initial compliment. And I think, yes, you're absolutely right. Developments in solar and wind and new vehicle technologies, all these things are happening. They drive certainly in developed economies a large part of the energy transition that are right things to happen as well. And for us then quite often the choice is to what extent do we need to participate in this. We need to participate in it in my mind if we have something to add, if we have a competency that is very close to that new business opportunity or sometimes we are prepared to participate in it to make it happen, so to speak, like things I mentioned before CCS. If we do not participate in it, it may not happen as fast as we would like it to be. Now some of the examples that you mentioned, I think are examples that are indeed very worthy. They are perhaps very good business opportunities for other enterprises, but that do not closely fit the core competencies of our company. And therefore, you will have seen that we are more prepared to incubate and help others be successful in that area than to adopt it and to ourselves get involved in energy efficient showers and light electric vehicles in cities etcetera, etcetera. And I hope you all respect and understand that, that every part of the industry and the economy needs to play to its strengths. On your point on cybercrime, that's a very important point indeed. And cybercrime is one of the key threats that this board recognizes that can hurt us, hurt us in many different ways. Our installations, of course, can be attacked, but also through our retail networks can impact the privacy of our clients, etcetera. And we take it incredibly seriously. Cybercrime is a regular feature on the agenda of this Board, on the Executive Committee's agenda. And every quarter, I have an in-depth session with our Head of Information Technology together with our CFO, Jessica, to really understand what is the progress, what is going on, what are the incidents, how are we responding to it, etcetera. The number of attacks we have on a daily basis, they rank in the many thousands. And so far, we have been able to counter these quite effectively. Not we don't have a 100% success rate, but it's pretty close to 100%. But this is a continuous arms race. We need to stay ahead of everybody else. So therefore, let me reassure you again that this is something that is right on the top of our risk register and is being managed very actively. Thank you. Number 1? Good morning, Chairman. My name is Charlie Kronick. I am a shareholder, but I also represent Greenpeace. First of all, I wanted to thank Van Dam Durden for what was a frankly amazing presentation on the challenges of climate change. I was just at the BP AGM last week, and I can tell you they've got a lot of catching up to do. The question I wanted to ask was very specifically about scenarios. Now following on from the SRI presentation you mentioned that took place in London a few weeks ago, where your Executive Vice President for Strategy, Guy Outen, gave a presentation about scenarios, which I read with great interest. And he I'm going to close him here because I thought it was so interesting. He said they are meant to stretch the thinking of our Board and executives and inform decision making. Now, obviously, you won't be surprised to hear that we couldn't agree more with that, particularly in the context of the warning from Pierre Wack, who was the original Head of Scenarios at Shell in 1970s, who said forecasts are not always wrong. More often than not, they can be reasonably accurate and that's what makes them dangerous. Sooner or later, forecasts will fail when they are needed most in anticipating major shifts in the business environment that might make whole business strategies in the most recently published in the most recently published full set scenarios, the new lens scenarios, there were 2 plausible futures put forward. One was where there were technological and economic breakthroughs in new unconventional oil scenarios and the other were technological and economic breakthroughs in unconventional gas scenarios. But neither one of those scenarios really challenged the overall dominance of fossil fuels in the energy future, which I have to admit you did acknowledge in your opening presentations. But they do include a rather disproportionate dependence on CCS, particularly in the area of negative emissions. And when you think about the development of CCS so far and its dependence on a carbon price, those do seem to be rather optimistic assumptions built into your scenario. So my question is really a pretty simple one. In responding to Matt Crossman, you suggested that you may or may not reveal future scenario sets whether complete or partial depending on external circumstances. But it just seems particularly given the real the really demanding targets of decarbonization or at least a net 0 decarbonization by 2,050 at the earliest to have a chance of getting to well below 2 degrees. It seems doesn't it seem absolutely appropriate that the business would reveal both the scenarios and the assumptions behind them to shareholders and to other stakeholders because frankly it would be very difficult to tell if stress testing was really helpful if it didn't show if your assumptions were very stressful. Thank you very much. Thank you for your question. Biren, would you respond please? Yes. Thank you very much, Mr. Frohnak. I thank you for your confidence. Well, I have an open mind. Let's take a look at it and see how much is relevant for sharing. As I said, we have a number of scenarios that we have developed recently as sort of a wider set of variations compared to oceans and mountains, which are the scenarios that you referred to, the new land scenarios, to stretch our thinking and really, again, to make sure not that we have a projection or a prediction about what could happen, but to test whether the choices that we make are resilient. So quite often, it's sort of if you give the sort of complexity of the sentence here, it is about trying to understand how we minimize maximum regret. So how can we make choices that we're not going to regret later in the absence of certainty how the future will look like. So we have 4 scenarios that sort of span aggressive and less aggressive government action, which will ultimately be one of the main determinants of whether we will succeed in tackling climate change or not and then also whether or not there will be significant technology breakthroughs, yes or no. And then we have a 5th scenario that says irrespective of how we think the world could respond and policymakers could do things and technologies can develop, let's just assume that somehow we will get to net 0. Don't know how, but we will use the norm of net 0 as an outcome to work back what this means. That scenario is available. It's in this book. It is at the end of the it's at the entrance in the hallway. I suggest you take it away because it describes what I think is still at this point in time the most demanding scenario for the world. This assumes and this describes what we need to have achieved by 2,070 in order to have a 2 degrees C increase in temperature. And this is one of the scenarios that we test our current decision making against together with the 4 others that I mentioned. Thank you very much. Number 2, please. My name is Mrs. Wida. I'm a long time stakeholder, also a long time psychologist. I would like to ask you about what kind of measurements will be taken in relation to the many people who have problems to adapt to the new ways of life created or dictated by the climate transition. The reasons people have may be different, but they all are victims, mostly poor people. There are also lots of people who just do not want to adjust quickly to new ways of life, maybe because they have other opinions about the climate. To which extent is Shell prepared to building itself with investments in climate related projects? Thank you. Thank you very much for your question. Getting the populations to the world to go with us in this climate change, this energy transition is very important. Nick, you bring up important points that each community around the world will see these change differently and we'll assure you we'll take that into account in all our planning. Thank you very much. Number 1? Good morning. My name is Angelie Gloskvitz. I am the Director of VBDO. This is the Dutch Association of Investors for Sustainable Development. Well, we have two questions relating to the Sustainable Development Goals. Our first question is on the STT 13. The STTs explicitly call upon businesses to contribute to realization. Therefore, Vibrio applauds Shell for recognizing its responsibility and for reporting on its contribution to these goals. For 11 selected goals, Shell outlines in general how its strategies, activities and ambitions contribute to reach these goals. This is a great achievement. However, concrete actions and targets for the most material goals still meet. So this first question is on this climate action. Climate action is of high materiality for Shell. Shell already makes efforts to address climate change, shifting more towards low carbon renewable energy sources. However, the company didn't set concrete time bound targets yet. This is also observed by your own external review committee. The IRC recommends setting targets to indicate the independent phase of Shell's transition to a lower carbon portfolio and to report on these targets. Fabrizio fully supports this recommendation. Our question is, is Shell willing to set concrete time bound targets for its contribution to climate action as the G13? And will these targets be included in your next annual report? And the other question is, other SDGs of high materiality for Shell are SDG 14, life below water and SDG 15, life on land. Shell recognizes the value of natural capital and makes efforts to protect and restore bio diversity and natural habitats. Shell is active in various partnerships and projects to enhance natural capital. This is laudable. However, Vibrio would like to see a more company wide overview of Shell's approach and actions for natural capital protection and restoration. This would also include targets. So is Shell willing next year to report on concrete action and targets for its contributions to life beyond water and life on land? Those were the questions. Thank you. Thank you very much. And we appreciate you studying our sustainability report so closely to look at our progress about all 17 sustainable development goals. I think Ben has addressed overall and answered the first question. Our views on targets that we need targets, but we have to make sure they're meaningful in the course of what we have. And of course, the Board will continuously consider not only what we report, but also what are appropriate targets. We have a number of sub targets already. And you raised additional ones and we'll certainly consider those. Thank you very much for your points. Number 2? Good morning. My name is Barnaby Pace. I'm a proxy shareholder for Melanie Strickland. Thank you very much for your short presentation on the APL-two forty five case this morning as just before the questions. I appreciate Shell telling some of their partners to the story and including it in the presentation to all their shareholders. My question is not about the case specifically. I understand given that Shell is facing trial in the case, it's a legal case, you shouldn't be commenting on it. It's more about the policies and procedures about how Shell is informing investors about the case and its business integrity policies. So my organization is Global Witness and we've been raising concerns about Shell's conduct with respect to a deal for oil block PL245 in Nigeria for around 9 years now. 2 years ago at the 2015 Annual General Meeting, I asked whether Shell knew its payment for this block would go to Malibu Oil and Gas, a company owned by Dan Tete, a convicted money launderer. And I was assured by Mr. Van Buren that the deal was and I quote morally okay and entirely transparent. This is consistent with Shell's repeated response over the past 6 years that the deal was a settlement with the Nigerian government as you said and that they only paid the Nigerian government. However, on the 10th April this year following the publication of Shell's internal emails contradictory this public denial of dealing with Mr. Etc and showing that Shell executives were told money would also flow to a vast bribery scheme. Shell's Vice President for Global Media Relations, Mr. Norman, told the New York Times that over time it became clear to us that Otete was involved in Malibu and the only way to resolve the impasse was through a negotiated test was to engage with Otete and Malibu whether we liked or not. He added Shell knew that Nigerian government would compensate Malibu to settle its claim on the block. This is a significant change in Shell's position in response to the allegations of corruption around this deal and how this deal took place over the course of its history. Given Mr. Van Burden's unequivocal statements at the 2015 Annual General Meeting and Shell's insistence over the past 6 years that it was only paying the Nigerian government, Could you please answer the following two questions for me? So the first question is, why has it taken 6 years to confirm that it knowingly, in Mr. Norman's words, is engaged with the convicted money launderer in this case? And question 2, in light of this admission, does Shell still hold the belief that the transaction was in Mr. Van Buren's words in 2015 morally okay? Thank you for your comments. As I said at the outset, we won't be able to talk about specifics of that case here or answer questions. I would refer you to the presentation by our legal director that was given in April and it's in great detail, plus it's a full transcript that describes the position on the case quite well. I read it with interest. I was wondering if you could comment why the change in informing investors about what they knew has changed. As I say, because the nature of this case, we're not able to make comments. That's why I gave a very complete description of the current status as we started and referenced the other material. But regardless of the legal case, is it morally okay to make money to a convicted money launderer? Shell has the highest standards of conduct. Our business principles are critical. I'm very proud to work with this company every day and the job we do for our customers. Thank you very much for your questions. Number 1? Good morning. My name is Luca Manes. I'm a proxy for Mrs. Patricia Dorothy Smith. I'm also mentioning the OPR245, but my questions will be on policies, general policies. So regarding the policy for independent investigations into allegations of breaches of the company's anti corruption policies, That's what I'm focusing about. I understand that an independent investigation into the Nigerian OPR245 case was only concluded in 2016, 5 years after the deal was done and 3 years after criminal investigations into the deal were first publicly reported. Who has responsibility for approving the instructions or terms of reference for such corruption investigations? How is the independence of an investigation assured through these processes? Is the timescale for the OPL 2 45 report usual? And does it represent good risk management? Thanks a lot. So I can't speak directly to this particular case that you talk about, but let me talk in general. The Board takes its obligations around governance very seriously. We work on this through a number of committees, including the Audit Committee and the Corporate and Social Responsibility Committee. The Corporate and Social Responsibility Committee actually goes and visits sites and understands firsthand what's going on in the environment. And we have a very extensive control framework within the company, a strong compliance department and internal audit department to support that. On occasion, we will have external reviews as we had in this case, which I referred to in my open comments. And when we find that's appropriate, we'll deploy that. Number 2? My name is Paul Tsang. I've been shareholder since last year. Also a member of the European Union Parliament. Being a politician, I'm well trained to speak briefly shortly and I will try that. Shell company, I expect to be a leading company, also leading in corporate social responsibility. You set the standard. What I haven't heard today and I would like to hear is the responsibility on corporate taxation. The principle is very simple. Company pay taxes where they make profits and companies are transparent about it. The first more general question is, is it part of your corporate social responsibility and where can I find it? I cannot find it in your in the corporate policy of corporate social responsibility. And then to more specific question because what's the reason why I became a shareholder in the first place. First, there are 31 subsidiaries in Bermuda, 29 on the same address. I don't suppose there's oil in Bermuda, shark oil, IFRS, but no oil. So can you are these there because of tax purposes? Seems likely right. The second question, my hypothesis is that Shell hasn't paid corporate taxes in my country in Benelux. I hope you will say it's not the case, but that you also make clear that you will reveal the numbers, the data on this, how much corporate taxes Shell has paid and will pay in the Netherlands in years to come. I hope you will answer this specific question also specifically. Thank you very much for your questions and thank you for your brevity of getting 3 questions out very fast. You lived up to your commitment. You asked a number of specific questions. I'm not sure we have answers for all those today. But Jessica, could you talk about tax based in general as best you could to the questions? Thank you, Paul, for the question. Shell absolutely recognizes the role of taxation in society. And I'd say it's part of our creating shared value agenda for the company. In 2016, we paid or collected on behalf of government some $55,000,000,000 in taxes. We paid corporate taxes in excess of $4,000,000,000 and we recognize the role of taxation in terms of bringing wealth and sharing wealth in the countries where we operate. We're very actively involved in various bodies in terms of increasing So we take that agenda very seriously and are contributing So we take that agenda very seriously and are contributing in various forums to improve transparency as well as various movements in terms of ensuring appropriate taxation, consistent taxation, again, with the goals of supporting society, but also limiting double taxation to make sure that there's attractive investment environments as well. We absolutely seek to follow all laws with respect to taxation and our corporate structures and our tax structures reflect the way we choose to run our operations for commercial reasons, for partner reasons, etcetera. So those aren't always immediately clear to people. But the intent is always to follow the letter of the law, the spirit of the law and to have our tax practices consistent with our principles in terms of creating shared wealth. Thank you. Okay. And I appreciate that you underline transparency. I think that's the key to corporate social responsibility with regard to corporate taxation. I have 2 specific questions, and I think that's part of transparency. What about Bermuda? What about the Netherlands? So I tried to address that to some extent already in terms of our corporate structures reflect a number of factors. When you operate in 90 countries and you have different partners, different businesses, different business models, That may not always be obvious why corporate structures are created one way or another. They reflect a series of decisions that we make to try and make the best decisions on behalf of our shareholders, but also on behalf of governments and on behalf of our partners. That's the intent. In terms of where we pay taxes, it's a reflection of our earnings. When we make a lot of investments in a given country, when oil prices have over the last couple of years that can impact the level of earnings we make and therefore the level of taxes that we make. Again, we absolutely follow the spirit and the intent of law. We believe in appropriate taxation and the role drive when and where we pay taxes. Okay. But I don't get specific questions, specific answers so far for a transparent. I'm trying to be as specific as I can. Thank you. Thank you. Number 1? Thank you, Mr. Chairperson. My name is Lisbeth Fontaine. I'm a shareholder. Want to commend Shell for publicly acknowledging at its AGM, as you call it, the earthquake situation in Groningen and the ensuing misery for the population there. And so I want to commend Ms. Van Loem for publicly apologizing to Dutch Parliament for the situation in Groningen and the ensuing misery for the population. My question is about Mr. Holiday said we should challenge old beliefs. And a part of the shareholders believe that a company like Shell can only influence Scope 1 and Scope 2, their own operations and the people that they are in direct contract with that they cannot influence scope 3, the customers. But other shareholders feel that they can indeed. And some of the examples that Mr. Van Burden gave in his excellent presentation show that indeed Shell is influencing its customers. So I would like to hear if possible from Mr. Van Burden to what extent he believes Shell can indeed influence scope 3. Thank you very much, Mrs. Van Tonneven. Let me make it a little bit broader first and then come into very specific Scope 3 arguments. If you talk about Scope 3 in general, and this is not any more the technically correct definition of Scope 3, but let's talk about emissions from our customers. In many cases, we do this, for instance, to, as I said, develop gas markets, for instance, in countries where the predominant use of coal for power generation or coal for general industrial activity exists. So by developing gas markets, which is a very complicated effect, gas markets don't happen automatically. They take a lot of work planning, risk management, etcetera. We actually move these customers from coal emissions to gas based emissions and thereby significantly improving not only the number and the amount of emissions, but also air quality. Technically speaking, we wouldn't get any credit for that because then on our Scope 3 emissions that reduce, that is Scope 3 emissions of the coal companies that reduce. Our Scope 3 emissions actually went up as a result of it. But nevertheless, we work to achieve this for the benefit of that particular country and hopefully the benefit for society. In many other cases, it's a bit more direct. So take for instance the case in Brazil or in other markets where there was a very significant part of biofuels in the mix. By actually pushing biofuels further into the mix, quite often also working with car manufacturers to try and understand how they can adjust technologies and an engine design to allow for a higher percentage of biofuels in the fuel mix. We indirectly also influence of course the adoption by customers of lower carbon fuels for cars. We can go one step further and we will by for instance understanding how we can compel customers to actually adopt fuels that have higher quality and lower emissions. Perhaps a little bit later this year, we will be looking at ways and means on how we can introduce fuels that have offsets associated with them. As a number of companies do in different segments is to make available for its customers the choice to use products that somehow will have less or no carbon emissions associated in general. We also work of course as a bit governments to understand how policy design can be improved to discourage the use of highly energy intensive appliances, how to work on the improvement of infrastructure for electricity and transportation, etcetera, etcetera. They're all a combination of direct and indirect. But ultimately, the biggest driving force for changing customer behavior, particularly where this consumer behavior, so the general public, will need to come from government, from politicians like yourself because they are mandated to do so. We are not mandated to somehow tell customers they cannot use our products. We can work with governments and politicians like yourself to just say if you design policies like this, you get the desired effect. And if you design policies like this, we will then be there on the day to invest in the consequential infrastructure or supply or products that are going to be needed. But we have not been mandated by society to take care of consumer behavior. What, of course, some shareholders are trying to do is to mandate you to ask you with a specific resolution to take a lead in that, not to go it alone, but to take a lead in becoming a company that together with governments, given the size of Shell, together with governments, goes in the direction of becoming the first, yes, instead of an oil major, a green major. And one of the reasons some of the institutional investors will not support the resolution is that they say the company cannot influence Scope 3. And what I gather from your words, which I agree with, companies can indeed to some extent influence Scope 3. So I hope some of the institutional investors present will consider your wise words before they cast their votes. Thank you very much. Thank you. Number 2? Good morning, everyone. My name is Rachel Lowrance and I'm the proxy for Ian Phillips. I'd like to thank the chair for the 1 minute silence as a British person. My question relates to Shell's risk factors referred to on Page 15 of the annual report, including violation of anti bribery and corruption laws. And the Shell's risk management system and internal controls, which are overseen by the board and the audit committee, are designed to tackle these risks. And on Page 7280 of the annual report, it notes that the Board and the Audit Committee carry out a routine annual review of this system. However, on Page 80 the Audit Committee report identified significant issues, but fails to identify corruption issues as one of those significant issues. In 2010, following a deferred prosecution agreement with the U. S. Authorities under which Shell paid 30,000,000 £30,000,000 fine and was effectively put on probation over bribery allegations in Nigeria, Shell committed to reforming its anti bribery and corruption system. And so I have two questions, Chairman. Can you please confirm whether the Board or the Audit Committee has undertaken or intends to undertake a separate review of its anti bribery and corruption policies and practices? And if such a review has taken place, can you please explain what changes have been made to Shell's anti corruption policies in light of recent developments? Many thanks. Thank you very much. Let me comment on your question, then I'll turn it to Yuline Goh, the Chair of our Audit Committee to add anything she would like. We routinely review those procedures and practices and we have reviews not only at the audit committee, but with the full board. And again, particular aspects even with the corporate social responsibility committee. But we must refresh those all the time because the challenges are costly with us. Yuline, would you like to add to the questions? Thank you for the question and thank you, Chad. We have a Chief Ethics and Compliance Officer and the audit committee hears a report from that officer on a yearly basis at least. And certainly, this is a topic that we keep under constant review as the world changes. And I can assure you that we have kept this review updated. And in particular, we have spent quite a lot of time in training our people in this particular aspect. So let me assure you that this is a topic that is under close supervision by the Audit Committee and by the Board. Can I just quickly come back and ask whether the Board would consider including the issue of corruption as one of the significant issues identified in Page 80 of the annual report? I would suggest that we would certainly put something in if there is significant material report that we should that we need to put up. And so we will consider that on a year on year basis depending on the materiality of the subject. Thank you. Number 1. Thank you, Mr. Chairman. My name is Jasp Jonsson, and I represent the Dutch Investors Association. I have three questions which are related to finance. The first is on the scrip dividend. In the past 7 years, the share count of Shell increased by over 25%. Exxon in the same period reduced the share count by 17%. I understand the effect of the BG deal, but there is a significant impact of the dilutive effect of the scrip dividend. So my first question is, what needs to happen before Shell removes the scrip dividend? My second question relates to the share buyback program, as you mentioned a little while ago. To my understanding, the share buyback program will get initiated if the debt is reduced and you need I'm sorry, we need higher a somewhat higher oil price. So we wondered if you could be a little more specific on the higher oil price and maybe give a ballpark figure. My final question relates to the Q1 results, which looked pretty impressive. But if you look at the return on capital employed, it was only about, I guess, 3.8%, which is still a lot below the cost of capital, which I think is about 8%. So my question would be, how long would it take before Shell generates a return that is at least equal to the cost of capital 8%. Those were my three questions. Thank you. Thank you very much. Very complete questions. Jessica? Thank you for your questions. Going in order, the first question with respect to the increase in the number of shares, of course, a significant contribution of that was the acquisition of BG, which we think was a wise use of equity. And hopefully, you're seeing the results of that strategy and that acquisition coming through in terms of the improved performance you've been seeing in the company for the last three quarters. In terms of removing the script, what we're looking for, what we've laid out is our financial priorities, our cash priorities. Our first priority is debt reduction. 2nd priority is our dividend. Once and then the next priority is removing scrip. And what we're looking to achieve from a debt reduction perspective is to bring gearing to 20 script. We want to remove it sooner rather than later. We appreciate the dilutive effect and would like to remove that as soon as it's financially wise for us to do so. Your second question on share buybacks. So as I walk through the cash priorities, as I said before, debt reduction, dividend, scrip, then we're looking to repurchases as we had spoken about during the BG acquisition period. Again, it needs to be a balance between repurchasing stock and ensuring repurchases and capital investment going forward. But again, the commitment is there to address the dilutive effect of the BG acquisition and Scripps. So that's absolutely the intent when we have the financial framework in the place where we'd like it to be from a gearing perspective. And I think you're seeing a company that's generating sufficient cash flow at a relatively low oil price. So I think things are trending in the right direction in terms of the the because my question was, could you be a little more specific about the somewhat higher oil prices? What should we think about? Is it $5 $10 $20 The cash generation of the company is a series of activities, if you will. And so I'm reluctant to say one price gives us an answer. It's a combination of things in terms of the performance of the business, the macro environment, margins in our downstream business. So I wouldn't want to give one number as giving you one answer. What I'm trying to give is a sense of the cash flow we need from the organization to support the financial framework and to point to our current results and the current price environment to give a sense of the cash flow generation of the company, which gives us increasing confidence in terms of our ability to work through those priorities over the near term. On the ROACE point, it is below where we would like it to be. So we are committed to do all we can, pull all the levers that we have from a capital efficiency perspective, from a cost efficiency perspective to generate industry leading returns across our portfolio. So we're not content or happy with the below 4%, and we are committed as a leadership team to generate industry leading returns as soon as possible. Thank you very much. Number 2? Good morning. My name is Eva Lee, and I'm here as a proxy for Pamela Coleman. My question refers to Page 61 of the annual report, the section on governance. I note that none of the current directors are experts in anticorruption. Given the risk of corruption in the industry and the specific allegations leveled at its shell in Nigeria, Has the Board's Nomination and Succession Committee appointed a nominee with specific anti corruption expertise? And if not, why not? And if so, when is the recommendation expected to happen? Thank you very much your question. I chair the nomination and succession committee. We look at a broad range of criteria and although we do not have someone that their whole career has been in anti corruption, we have people who have a broad range of knowledge of that from government service to ambassadors to broad ranging business interests to much work inside financial institutions to deal with corruption all the time. I think we have a Board that has the capability to evaluate corruption. That we bring in experts as necessary. We have many experts inside the company. So I'm quite comfortable that we have the depth on the Board to deal with any corruption issues. Thank you. Given that the OECD has named the oil, mining and gas industry as one of the most corrupt on the planet, do you not think it might be worth bringing in someone specifically with those expertise? I understand and take your point. We'll certainly consider it. But right now, I feel very comfortable that we have a balance of knowledge in the Board that can bring in any specific expertise we need. It's better formed that way rather than having just a corruption expert on the Board or an expert in any one field. We need board members with broad ranging capabilities who can talk to all the subjects to come up with the board. Thank you again. Number 1? Good morning. My name is Louise Drais, and I'm a shareholder. I have a question, which is one of clarification in relation to a speech that the CEO made at Birawik, I think it's how it's pronounced, in Houston. Oil spring break, I think, might be another way to describe it. So I'd like to begin, as you think Mr. Chairman, by quoting a UN General Secretary. And Ban Ki Moon was a signatory to the letter, along with a number of other former world states people where it said developing countries must grow by using clean energy that decouples economic growth and greenhouse gas emissions. So just as we're trading what former UN General Secretary think about climate change. In 2014, Shell responded to shareholder queries about the risk of stranded assets, saying with some urgency that they did not see governments taking the steps now that are consistent with 2 degree temperature increased restrictions. In Houston, Mr. Van Buren, you're quoted as saying, Shell's strategy is clear and resilient to the envisaged implementation of the Paris Agreement. So I just want to clarify, the lawyer in me immediately zones in on the words envisaged implementation. And so I just want to know, when you say the strategy is resilient to the envisaged implementation of Paris, do you mean it is resilient to well below 2 degrees with an ambition to 1.5? Or do you mean the NDC contribution plus 3 degrees? And if the latter, given that most people in the world are not lawyers, do you feel that there is a tendency for what is kind of commonly called the man on the street to misunderstand what you meant? Thank you very much. Let me preface my comments by saying that I'm not a lawyer. So I wasn't intending to be clever with my words. But what I meant to say is that the company's strategy is resilient to whatever the outcome of the Paris process is. Now if I understand your question correctly and forgive me for interpreting it a little bit, yes indeed, the intention of the stated ambition of tariffs is to have a global temperature rise of well below 2 degrees C, in other words, 1.5 degrees C. The 2 degrees C has been mentioned. And then we have the international contributions that are being made. If we need to get to 2 degrees C, we need to get to a net 0 society by 2,070. And that is basically what is described in this scenario. It will be a very ambitious journey for society and I think it will be a very ambitious journey for participants in society like ourselves to get there. But I think we can do it. If we need to get to 1.5 degrees C, we need to have that net zero emission society 20 years earlier, 2,050. I think that is sort of in the realm of sort of fantastic if we were to achieve that. But if we as a society would put our minds to it and would do it, if indeed governments and consumers and everything else would come together and achieve that, I'm quite confident that we will be able to not only navigate that transition, but will come out as a winner. To be perfectly honest, I do not think it's very likely with the way we are going, which brings me to the 3rd point, which is the national contributions that have been made. If you just add up everything that every government in the world that came together in Paris has pledged, they're not going to be close to 2 degrees C. It's not going to be even close to 3 degrees C. So a whole lot more needs to happen to just get close to the sort of more modest ambition of Paris, which is the 2 degrees C. And the problem that I have with this is that I'm also a global citizen, that I also have a family, I also have children who also ask me, Papa, what are you doing about And the problem is that quite often I find that the whole discussion around climate change is characterized into something extremely simplistic. Leave the fossil fuels in the ground, just install a few Marsau panels and we will be fine. Or those people in Africa, why would they need energy? So it can't be done that way. It is a lot more challenging and a lot more complex than we somehow like to believe. So yes, we need to step up our efforts quite a bit. We want to play a role in stepping up those efforts. That's why we are intensifying the way we engage with governments, trying to do the right thing. But for one thing I'm sure is that whatever route the world takes, we will be happy and we will be ready to follow that route. And partly it's also because it will not happen overnight, but the best will in the world, we will not get to a net zero emission by next year or by next decade. And if you then look at the amount of regret that we will have in our portfolio because of the energy transition, it is actually very small. We will be able to comfortably adapt the portfolio, the strategy, make the right decisions to whatever in the end global governments will decide to do. I hope it will be less than 2 degrees C though. Okay. So just to clarify the statement in the speech was as in a speech sort of an ask a statement that is not meant to be a fixed sort of it's resilient to this particular thing, but rather, as you said, it would be resilient to whatever is the outcome because we as a company are sufficiently able to adapt. That's what you meant by that. Okay. Thank you very much for clarifications. Thank you. Number 2? Hello. My name is Thomas O'Neill and I'm here by proxy representing InsulinNet. Now my organization completed a study last year where we found that Shell was spending $22,000,000 a year lobbying against climate change and energy policy. Now most of this money flows through a series of trade associations such as the American Petroleum Institute, which opposes the UN Climate Treaty and the Western States Petroleum Association, which opposes emissions trading legislation in California. Now given clear misalignment between your statements to investors and the actions of these trade associations, which are operating with your brand, what can Shell do to manage this risk in the next 6 months? And can you commit to distancing yourself from public policy that doesn't represent you? We first thank you very much for your question. We are in some associations because we need to be because they take a broad range of actions such as safety, but we might not agree with every statement they make. We are active in there trying to influence those organizations to come to policy positions we would take. That doesn't hold us back in any way as Ben so eloquently described this morning, taking very strong positions ourselves and using our energy accordingly. So would you be prepared to distance yourself from the position of the American Petroleum Institute on U. N. Climate change? We evaluate each organization to make sure our value add is appropriate. It's the right thing to do. We have dropped out of organizations in the past. I'm not appropriate to comment today on our membership in any one organization, but your point is taken. Number 1? Thank you, Mr. Chairman. My name is Jochemmann. I work on global our global footprint and impact. And I have a question about security and responsibility, safety as well. Last year, I asked you a question about the report by Dara in Madrid with the it's titled Climate Vulnerability Monitor. And it's a report about 400,000 climate deaths per year, which is a part of the total amount of 5,000,000 people almost killed every year in the chain of fossil fuels. So coal and gas and oil are really very dangerous besides the climate change issue. So my question was last year, do you know this monitor? And you asked me after checking your 10 directors, no, we don't know the report. And then I offered you at the lunchtime 10 folders referring to that monitor. So now I have a new question, which is now more important. Did you study any of you that monitor, the Climate Vulnerability Monitor? And what is your reaction on the conclusions that almost 5,000,000 people are killed every year in the fossil chain? Do you feel responsible for this whole chain and the well, we could call it a global social drama? First, thank you for giving us copies of the report, and we did study that. And I would say one example of how it influenced our thinking was my presentation this morning, where I like to talk about all 17 sustainable development goals, which shows that as a company, we must think about all aspects of our products and what they do. I won't comment the individual numbers that you talk about. But what I can assure you, Shell is a responsible citizen that thinks about the full impact of what we're doing and reports on it through our corporate sales report. Don't you think that you have to respond to that report? I think it's too vague to just tell me you have seen it or you have studied it. It's a real killing chain gas, oil and coal. So we must run besides the climate issue to run to shorten and to stop the whole chain of fossil fuels. I think we can respect we can expect from you a reply to this monitor. We will we speak to the subjects that you talk about in our corporate social responsibility report. We can't respond to every study that's made, but we do appreciate you raising the point and all shareholders had a chance to hear your point of view. Thank you very much. Okay. I hope you will put it in the notes of today. And remember, we talk about ecocide nowadays. This is one serious example, the whole chain of fossil fuels. Thank you. Thank you very much. Number 2? Thank you. Good morning, Mr. Chairman. My name is Juliet Phillips, and I'm the shareholder. As Van Verden mentioned in his opening speech, Shell's future resilience hinges on the long term value of its gas portfolio. I have some concerns about this. The majority of forecasts point to the LNG market remaining oversupplied for years to come with prices remaining subdued. On top of this, predictions of bullish demand for gas are increasingly being called into question. The International Gas Union 2016 World LNG report predicts weak demand from Asia and stagnant growth in China. Looking further into the future, there are questions around the role of gas as a transitional fuel, the quickening pace of renewable penetration could lead across the means of gas and the increasing digitalization of the global economy and developments in additive manufacturing are killing demand from the transport sector. In light of these challenges, one can question the prudency of allocating vast sums of shareholder back capital into expensive, long lived projects like the Prelude project with estimated costs of over $10,000,000,000 If Shell cannot envision itself beyond oil and gas for years to come, as it's been alluded to in statements today around renewables, would the company instead consider returning cash to shareholders in order to ensure that value isn't destroyed given these permanent conditions? Thank you. Thank you for your question. Bien? Thank you very much for that question. Let me first of all say that we are great believers in the long term future of natural gas. We see in the foreseeable years still demand growth in oil, but we see much stronger demand growth in natural gas. As a matter of fact, we see demand growth in gas to be twice as high as the demand growth in oil. Within gas, we see the demand growth in liquefied natural gas to be twice as high as the average of gas. So in other words, there is a 4 times higher demand growth for LNG. A lot of people can argue when will oil peak. It will probably peak when demand peaks. But the peak for natural gas is many, many years, if not decades, further into future. As a matter of fact, we believe the energy system of the future by the end of this century will still and should still have a very significant percentage of natural gas in it. As you will remember the pie chart that I showed, it is simply not possible to serve every societal need with renewables. We will also need molecules of one sort or other. And these molecules be better gas molecules than coal molecules in our view. So we think that there is a very long term healthy future for natural gas. Now like any other commodity, natural gas market also cycles. And therefore, there will be periods when there is faster or less fast demand growth, but there is still demand growth. And at the moment, we are indeed in a phase with many new supply projects coming on, that there is more supply coming on, that there is demand growth in the near term. But actually the markets are still balanced. So a lot of people think that somehow natural gas is looking for a destination because it can't find a market to land in. As a matter of fact, quite a contrary is true. The market of last resort, which is the European LNG market, is still relatively tight. And we will see that all the way through to the early part of the decade, next decade, that situation, but sort of relatively healthy supply, but nevertheless a balanced market will remain. And then I think, which is the case with many of these very large scale investment markets, you will see a tightening in the supply demand situation again. In the interim, we if you will study our strategy and our investor presentations, we have decided to focus a lot of our investments in LNG not on bringing new supply on. Of course, we finished what we started like Balyut and Gorgon and other projects. But a lot of our investments are actually on strengthening the existing LNG chains and also developing new markets. So whether it is developing new markets in South Asia, in the Middle East, in Latin America, developing new customers in China, which is a very small percentage of gas in its energy mix at the moment, trying to grow it. This is where at this point in time the dominant part of our investment dollars will go. So indeed, you're right. There is a cycle and we need to understand how to respond to that cycle. And we need to understand when we are ready again to take long term supply investment decisions that they are targeted at that point in the cycle where demand is also strongly rising again. I am concerned. I mean, as we've had other shareholders mention, you have taken some conservative outlook for renewables in other markets. And there's so much capital being allocated into these gas projects at the moment. Do you have a strategy in place for a low gas scenario where these bullish predictions don't come forward? Yes, we do. As I mentioned earlier, we have 4 scenarios with different government intervention profiles and technology development profiles and then the net zero emission scenario as well. They all have different outcomes for gas. And therefore, we have to understand if you want to take decisions on gas, how will that play out in these different worlds that we envisage. And we cannot pick the world that we like. We have to pick the world that others will create for us, we are all collectively. And we have to understand how these investments behave. And therefore, we need to be prudent, which we are, with some of the investment decisions that we make. At this point in time, it means we focus more on developing gas markets than we focus on supplying new gas into those markets. Thank you very much. Number 1? Good morning, Mr. Chairman. My name is A. G. Sanyo, proxy. I'm also from the Philippines, one of the countries most vulnerable to the effects of climate change. In that context, I'd like to thank you for taking on this issue in a proactive manner as seen in your presentation earlier and for laying out a more ambitious future for the company in terms of climate issues. However, I'm not focusing on the future, but more on the past. I'm a victim of and a survivor of the strongest typhoon that ever happened in human history. In 2013, almost died, but obviously I'm here, but best friend and his whole family perished in this event. So in 2015, along with 17 individuals and about 14 NGOs from the Philippines, we filed a petition in the Commission of Human Rights in the Philippines where it's the top 50 polluters of the world. And my statement will be about to pass, okay? So yes, we filed it in 2015. But the companies, just like Shell, are stopping this first ever national inquiry into human rights and climate change from moving forward. Today, I am simply challenging you to ensure the company to be part of the solution by fully participating in this national inquiry. We, the petitioners, come from the Philippines. And like I said, we are one of the most vulnerable countries burning the brunt of the impacts of this big issue. And Mr. Chairman, our lives depend on this moving forward. So I'd like to ask 3 simple questions. First, why Shell seeking to stop the investigation in the Philippines asking the commission to dismiss this petition? 2nd, how will Shell respond to requests to participate in pre hearings, public hearings and other activities conducted by the same commission? And lastly, when will Shell provide the commission information about the corporate commitments and plans to prevent climate related human rights impacts? Thank you, Mr. Chairman. So first, thank you very much for being here. I'd like to say on a personal basis, I've attended climate conferences throughout the world, but I've never been more moved by the one I attended in the Philippines because of the flooding and such a direct impact. And so I understand the loss of life that's happened. Then we'll answer the specific questions. Well, let me add my voice to that as well. I have not been attending a conference in the Philippines, but I'm very much aware of the flooding events and other events that happened in the Philippines and the devastation that has caused so many people there. And also there, my sympathies come out to your people for that these natural disasters have occurred. I think our position on climate change is well known. We have debated already a few times this morning. We are clear about what society needs to do. We are also clear what the role is that a company like us can have in that. We support Paris and we will do everything in that respect to move this forward because we do indeed believe that these dangers are real and there is a correlation that we need to be mindful of. But human rights, we do believe that this issue is outside the mandate of the Commission of Human Rights in the Philippines. And that's why we have responded in the way we have. On your second question, will we be responding to an invitation of the commission? We haven't had an invitation of the commission. And when we receive 1, we will take a view on it, what actually this commission and the invitation is all about, and then we will respond accordingly. But bearing in mind that we do not believe that this is within the mandate of the commission that you mentioned, even though we have tremendous respect for that commission. And then when it comes to when will we provide information and commitment, I think we have done that this morning and on other occasions. And we will continue to do that, not because of the commission, but because we believe that this is what we need to do as a company. Thank you. And still hoping that you change your mind. Thank you. Thank you. Number 2? Hello. My name is Simon Taylor. I'm a proxy voter for Andrew Clark. I would like to just begin by thanking you for your statement on the OPL 2.25 matter this morning. And the question I want to put is not to do with the specifics of the case. So I hope you can bear with me. It's more to do with risk management. I noticed a couple of days ago that Critical Resource produced a negative CC rating for the blog, which they suggest faces the hazard of being lost. And that would be consistent with the efforts by the Economic and Financial Crimes Commission in Nigeria to seek the removal of the block from operation. And of course, that return back into holding by both Shell and by Eni. So my question really relates to risk management and the extent to which that situation may be consistent with the CC rating. Have you can you confirm whether or not you've set aside any provision in light of this potential increased risk or have you not? Thank you. So I won't be able to speak to OPL-two forty five or risk you talk about. What I can assure you is we have a very rigorous process overseen by our audit committee to be sure we set around the proper provisions for every risk. And we're very comfortable. It's a good process. It's working effectively. We audit it periodically. I have great confidence in that process. Thank you. Number 1? Thank you, Mr. Chairman. My name is Laurie Sandenberg and I am here by proxy on behalf of Melio De Finci. Shell strongly supports the Paris agreement. I'm sure I don't have to remind you that the Paris agreement sets the target to limit the global efforts temperature rise to well below 2 degrees and to pursue efforts to limit the temperature increase to 1.5 degrees. According to research published in scientific journals such as Nature and to the IPCC, if we are to keep a chance to stay well below 2 degrees, 2 thirds to 4 fifths of all proven fossil fuel reserves need to remain underground. Shell acknowledges this. According to David Hone, Shell's Chief Climate Change Advisor, it is certainly the case that current proven reserves will take us well past 2 degrees if completely consumed and the CO2 emitted. Even though we don't have already found more fossil fuels than can be burned in a well below 2 degrees world, Shell still spend 1,000,000,000 a year looking for more. In the 2015 report, Carbon Tracker found that in a $450,000,000 scenario $77,000,000,000 of Shell's capital expenditure on oil and gas would be unneeded. I have two questions. 1st, considering the carbon budget, how do Shell's continued investments in exploration that will further enlarge the world's proven hydrocarbon reserves aligned with Shell's strong support for the Paris agreement. 2nd, if Shell is not able to exploit all of its proven fossil fuel reserves, what financial implications does it have for shareholders? What are the financial risks of continued investment in deepwater and in shales in the context of goals set out in the Paris Agreement that imply a limit to oil and gas production? Thank you. Thank you very much for your question. I believe Ben has addressed much of it in his earlier comments and answers to questions. But let me simply say we have a rigorous process of scenarios as Ben described, to look at different alternatives, as you point out. And we keep good track on what our proven reserves are and how we would utilize them. The Board is very comfortable that we're taking a very prudent approach to that, but I assure you, we'll continue to monitor that and adjust our investment program as necessary as we go forward. Thank you for your question. Thank you. Number 2? Hi. My name is Sandeep Slackers. I'm a proxy for ADH Fossil III. And I have a question regarding your gas strategy. Now that I acknowledge that gas is at least just as bad as a fossil fuel as bad coal and oil, what are the implications to your gas strategy? Maybe we should call gas for what it is, methane. Methane is one of the most dangerous greenhouse gases. Methane traps 86 tons more heat than CO2. Because it's so potent, only a small amount of methane leakage, 1% to 3%, will make gas as bad as diesel and coal. Unfortunately, gas does leak more than 3%. A review of more than 200 studies by Stanford University confirms an average methane leakage of 5.4%. That's almost twice as bad for the climate as coal. At some sites, gas leakages was found around 12%. That's 4 times as bad as coal. Those numbers are from the U. S. Do you think it's any better in Russia, Iran or Iraq? You claim methane is a solution to climate change. You claim methane is a bridge fuel. Really? I guess 86 times as bad as CO2. Are you sure about gas? Are you convinced that what you do is best for your future as a company, for our future as humanity? What if you're wrong? You say you have aligned your business with the Paris Agreement. You say you might climate change. If you do, don't tell us, show us. Show us by moving straight to the sun, the wind and the water before the sun by global warming, the wind by extreme weather events and the water by sea level rise moves us. And my question to the board is, in your business case for gas, do you take into account an average methane leakage of 5.4% and the global warming potential of 86 to 106 that is relevant for the 1.5 degree to go of Paris. Thank you very much for your comments. We think it's very constructive to bring up different points of view. We firmly believe natural gas is part of the solution, but the points you make, if it's not handled properly with methane leaks, it can be detrimental. We're keenly aware of that. We support work in our facilities to make sure they're the best in the world. And secondly, we support regulation throughout the world to be sure the entire industry is doing the right thing as you said throughout other countries. But we're still absolutely committed that natural gas is a part of the solution and are committed to bring that solution. Did you read the report of the Stanford University of last April in which they claimed that technology for use in methane emissions is just between 15% to 75% effective, and there are many unknowns when it comes to methane emissions. Do you acknowledge that you can't control methane emissions? No. I have not read the specific Stanford report, but we have extensive work with Stanford, including next week. We have an expert from Stanford coming in to share a number of their results with us. But we have studied the technology completely, and I'm absolutely sure Shell can do the right thing. But I agree with you totally. We need to make sure the entire world is doing the right thing on methane and we support that completely. Thank you very much for your questions. Number 1? Dear Chairman, my name is Willemijn Verdechel, employed by the Dutch asset manager, Amand, and honored to speak on behalf of our clients, the pension funds, PME and PMT. Please allow me to highlight my sincere appreciation for the open and constructive dialogue we've had with you personally, Shell management and other staff regarding Shell's role in regarding the energy transition. In our intensive engagement over the years, we along with many other investors have clearly asked Shell for climate related targets. In recognition of the systematic risks that climate change poses to both our long term financial return and the well-being of our future beneficiaries, we do expect our interest D companies to be very clear in articulating their strategy to align with the Global 2 Degrees goal. Clear, quantifiable and time bound company wide targets empower investors to understand vision and track progress. Against this background, we were more than disappointed by Shell's reaction to the follow list resolution. Stating that it is detrimental to the company illustrates to us a fundamental misunderstanding of the decisive leadership that is required by this generation of business leaders to prevent dangerous climate change for all future generations to come. This reaction also seems inconsistent with all the actions that Shell is already taking and planning to take. We have already branded the resolution to have been a fair ask. Company wide targets on Scope 1 and 2 emissions are becoming very much accepted in the extractives and oil and gas business. We understand and sympathize with the technical complexities around Scope 3. However, we believe the resolution allows for the flexibility to craft intelligent ambitions, including metrics around avoided emissions and detailed plans about working with clients to reduce emissions throughout the supply chain. Combining shorter term targets as well as aspirational goals could provide a powerful formula going forward. At the very least, we had expected Shell to be more sensitive to the societal signals this resolution communicates and to have indicated an intent to start formulating company wide targets that may be a better fit in your view. In short, we had not expected to let Shell let the perfect be the enemy of the good and had expected a very different tone at the top. Vision and accountability is what we require of the leadership of companies we invest in. And in reflection of the gravity of the issue of climate change, we will vote for Resolution 21. We strongly urge Shell's leadership to commence the development of company wide targets and stand ready to support Shell in any way we can. Also a clear indication by Shell to report along the guidelines of the FSB task force and climate related financial disclosures, therefore indicating the value of targets as a monitoring tool and the materiality of Scope 3 emissions would be seen as a strong and positive step forward. Dear Chairman, in view of this statement by 2 major Dutch institutional pension funds, please stand ready to act on these points. Thank you very much for your comments and statements. It was clearly around Resolution 21. If you don't mind, we would like to respond to that when we get to 2021 because we want the proposer to have a chance to make his statements first. So we'll respond then. Thank you. Number 2? Sorry. My name is Juri Alsford. I'm a member of the City Council of The Hague. Within the City Council, I'm a citizen representing The Hague, the Hansdestotzbertheide, The Hague City Party, one of the ruling parties of the city. The Hague is the city of peace and justice. And climate change is one of the prime causes that prevent peace and justice. And therefore, the City Council has decided that The Hague should pursue first the highest Paris goal of The Hague of 1.5 degrees maximum, not the 2 degrees. And second, that the transition to the fossil free and sustainable society has to be fulfilled before 2,040. I'm here for two reasons. First, to urge you to pursue the same higher goals. But second, to explain how important your employees are for the city of The Hague. The Hague and your board members, Weyers and Jean Novotis, has suffered a lot in the past from a reduced number of employees from the national government of the Netherlands. And with this current position of the large oil and gas sector in GEAH including Shell, we fear for massive loss of employment again and first in exploration. If Shell is not changing its strategy to a fossil free sustainable path, if Shell is not investing in its employees for the skills needed on this fossil free sustainable path, we believe the Hague will lose a lot of employment again and this time from the oil and gas sector. And this impacts the city in lots of areas among them housing crisis, small businesses and the cultural sector. And I would like to invite the Board to support the shareholder Resolution 21 and to discuss the employment issue also with us. Please take your employment future proof, among them our DHEC citizens, by teaching them the skills for a fossil free sustainable energy And are you willing to open this discussion? Thank you. Thank you very much for your comments. They are very clear. We're very supportive of the Hague. I think we could have more detailed discussion offline, but we appreciate your comments very much. Thank you. Number 1? Good morning, Mr. Chairman. My name is Anne Marie Williams, and I'm here by proxy. Shell has made it explicit and we've heard a lot this morning that it has no plans or doesn't envisage moving to a net zero investment strategy and its investment horizon in the next 10 to 20 years. This comes despite your former CFO, Simon Henry, recently noting that oil demand could peak in as little as 5 years. A growing body of evidence suggests that this delay could pose a significant risk to shareholder value. In particular, the penetration of electric vehicles has been described by ratings agency, Fitch Ratings, as creating an investor debt spiral for oil companies. In recent months, India has announced plans to electrify 100% of its vehicles by 2,030. China too has recently unveiled major plans to scale off its electric vehicle fleet by 2025. In light of these changes, the IEA last week announced that it was looking to revise its oil outlook. With the Board of Shell envisage an investment strategy consistent with a world where the majority of vehicles are electric by 2,030, What prevents Shell from committing to a net zero investment strategy by 2020? Thank you very much for your questions. As Ben pointed out earlier, we use scenario planning at the Board level and the management level. So we have a wide range set of scenarios that we're considering actively considering this year. And as we see the fact based that one of those scenarios will adjust our plan to quarterly. We feel as a Board very comfortable that Shell has the resources to operate under a broad range of outcomes and we'll do that. Thank you very much for making the point. Thank you. Does that include then if the majority of cars are electric by 2,030, one of your scenarios takes that into account, is it? Yes. Yes. Thank you. Thank you. Number 2? Good afternoon, Mr. Chairman. My name is Holger Vermeida, Head of Dutch Equity BNP Paribas Investment Partners. I've got a question regarding Royal Dutch Shell's strategy for debt reduction and gearing. I understand it from the finance director that one of the and also the CEO actually to bring down the gearing to put it more comfortably in the gearing range of 0% to 30%. And it's actually that gearing range, Mr. Chairman, that's intrigued me a bit. I don't really understand where the range comes from. I understand why it's down, but I don't know where it's come from. I clicked in the annual report and some others as well. But I can't find anything where it comes from, who decides on it and why it is between 0 and 30 and not 25 and or any other number basically. And most importantly, Mr. Chairman, I'm wondering why does Royal Dutch Shell think that the current range gives the company enough flexibility to realize its ambitions and fully support as a shareholder. You for your comment. Let me comment from the Board perspective and I'll ask Jessica to add to that. Clearly, we want a conservative financial framework that was on our strategy. It was in the big oxygen on the chart I was talking about this morning. We believe that 0.30 allows us the flexibility to do that, but also take advantages of certain opportunities that may come up. Jessica, could you add? I think that's the most important principle is the desire to have a financial framework and a balance sheet that is robust and resilient through the cycle. And for the nature of the company that we are, the size of the company we are, the nature of our business and our counterparties, governments and our people we trade with, having credit rating in of AA from an S and P perspective is consistent with the gearing of 20%. But I think more important, it's not so much the rating itself as it is it reflects the financial resilience and robustness of the company through the cycle. And that's where we believe, given the size of our company and the nature of our operations, the position we would like to be from a financial framework perspective. So if I understand it correctly, it's a Board's view, decision to have it between 0 30 throughout the cycle. When actually does the Board evaluate this range on a regular basis, once a year, once a decade, once a century? What's the idea? It's a part of our overall financial planning every year. We have the opportunity to adjust that range. We found it though for several years to be the right range. I think it's serving us well at this particular point in time. It allowed us to take advantage of the BG acquisition and we're making progress as Jessica described. Thank you very much. So we're past the twelve:30 mark. We do want to give everybody a chance to talk about the other 20 resolutions that we have. So if you'll be as concise as you can with your question and we'll try to be concise with our answers. Number 1, please. Good afternoon, Mr. Chairman. My name is Namdi De Haas and I am here by proxy to raise concern about the prudency of Shell's new budgeted water strategy. Shell has been able to breakeven cost below $40 a barrel by cutting corners on safety and sustainability. In the Gulf and Brazil, the firm has slashed 25% of its workforce and cut the number of support ships from 61 to 16. If equipment breaks, replacement can now take 2 weeks to arrive. The company's approach of re tapping old wells poses major risk of hydrogen sulfide leakages. Shell describes deepwater as a strategic growth priority, yet in today's low oil price environment, this is only viable by taking considerable cost cutting risks. Deepwater projects are inherently hazardous and should not be done on the cheap. We cannot afford a deepwater horizon. Shell identifies renewables as a high risk investment and allocated less than US1 $1,000,000,000 to its new energies division in 2016. In contrast, it allocated US8 $1,000,000,000 to deepwater. Whale Shell reassess its risk appetite for deepwater going forward and consider redirecting capital as part of a more prudent low carbon strategy? Thank you. So with all due respect, I have to take a great disagreement with your assumptions about we've taken safety risk or environmental risk around deepwater. That's quite the contrary. And it's something the Board pays a lot of attention to. I personally visited our deepwater operations earlier this year, spent 2 days understanding exactly what was going on and ask people directly, did they have the resource they need. A group of our Board will visit our deepwater facilities later this year. So we have absolutely no evidence. Quite the contrary, we're doing an extremely good job of deepwater. I'm very proud of our operations there. We'll constantly evaluate the best place to deploy our capital as Ben described his presentation. We believe Deepwater is a place we can contribute to the world and really provide competitive advantage, But we do appreciate your point of view. Thank you. Number 2? Good morning, Mr. Chairman. My name is Janusz Vienta. I came from Poland and I have described risk of erosion of business reputation as a result of the failures to compete with rules. That sounds serious, but it is serious. Like someone's 3rd reputation is lifetime to build and second to destroy. Anyway, before erosion of reputation is it appears, it must be the root of bridges which can go to public opinion. My question is, do you predict increase of the root of bridges which is based to materialize at risk. And if yes, towards such increase could be related. Does it related to lack of the education, training to employee and they cannot properly recognize the rules breaches or they can properly train, but they don't report rules breaches because of their own reasons or they employ are well educated and voluntary report rural breaches, but there is problem on later stages or you can recognize any other issues, which could increase this growth of breaches and this risk of erosion of business reputation can materialize? Thank you. Thank you for your question. And we take the subject of risk management and how our employees view that very seriously. It's something I know our management team sets example for every day, but particularly the Board has extensive reviews with our compliance organization, internal audit organization, plus employee surveys and our direct interaction with employees to understand issues that they may see. So we appreciate you writing the point. It's something we'll give good diligence to, but I'm very comfortable with the current situation. Thank you. Number 1? Good afternoon. My name is Spanier. My name is Spanier. Agents and a few questions. What are the legal and economic consequences resulting the Brexit for Royal Dutch Shelf Plc? The license and other paperwork are considerably and these are valued before 23rd June, 2016 and what and the time of the Article 50 procedure 29th March 2017. My question is, is it not wise to get the legal structure into a Dutch NV instead of a PLC and started today, 23 May, 2017, German. If we don't do that, then we have not only the Panama Papers, we have in the future also the London papers, because then we have then they said that this is a tax country and Shell is going to a tax country. I don't like it. I don't like I hope you don't like it as well. So in my view, it's an fee structure the best way to start. And then the next question is because you're also in Ireland and Ireland attempting to referendum to get right of England and then to try to be a member of the EU. That takes a lot of time. That sort of person, they have to think about a long time. When you are an NFE, then you are in the European Union and then it's in my view a little bit easier for doing business in Ireland. And my second item is Shell works a lot in water rights areas. So you can easily build a savory plantation next to your platforms. A huge Sherman wrote a letter all types of energy, but Savia I couldn't find, why not? And I know that sort of technology by my own. I hope we can be we can start together to run that Xavier business. That's where my questions at the moment. Thank you very much. There's an information desk out front. If you'll give your information there, we'll get back to you to follow-up on the last subjects, the ideas you had around our rigs. But Ben, could you make some brief comments on how we're dealing with Brexit? Thank you very much, Chairman. Yes, we were not a at the time, this was still under debate. We're not in favor of the scenario that we are facing at the moment, but we are where we are. We, of course, study how this will play out over the next few years. And we will adjust accordingly depending on how these negotiations play out. Let me remind you that we used to be a dual headed company with an office a central office in London and in The Hague for many years before the European Union was even born. So the whole concept of Brexit, bearing in mind that both the U. K. As well as the Netherlands are actually relatively small countries in our overall portfolio is not really an issue that really worries me a lot. If there would be a reason to consider our corporate structure, we will do that, but I would not imagine Brexit is going to drive that. As far as seaweed is concerned, we've looked at these technologies and we believe it's not as competitive as some of our other biofuel technologies that we are pursuing. Thank you. Okay. Number 2? Good morning, Mr. Chairman, dear members of the Board. I would like to speak to you as a former financial analyst and an investor in Shell. I'm deeply worried because we've talked about climate change a lot, but I'm deeply worried about your current investment strategy. As Ali already pointed out earlier, China and India, which are a large part of your scenario of growing oil demand have recently announced plans to massively switch to both of new 1,000,000 and electric cars. Your one of your main competitors, Total, has recently announced to turn 5,000 gas stations into service stations powered by solar energy and battery storage. I'm worried, but also anxious to hear your investment strategy in that regard because your current plan with 10 charge points in the Netherlands is frankly even less than a startup Fosnet, which has 60 and is Banco Expans with Germany and London. So my view, this is currently completely inadequate and completely not in line with the trends we see happening globally. So thanks for your comments. If you refer back to Ben's presentation, he laid out the 5 goals for our downstream organization. I think very completely described what we're striving for. And I think they're much more complete than anything that might be in place today. So I believe I asked you to refer to that rather than have to just repeat that again, if that would be okay. I would just like to point out to you that Total is already saving $40,000,000 yearly with that investment strategy and your current plans are only 1.0.2 percent of those plans. So I would greatly encourage you to look further into those plans. Thank you very much for suggestion. Number 1? Good morning. I'm Desiree and I'm from the Philippines as well. Thank you for your response to my colleague earlier. I just wish to clarify that the legal petition in the Philippines is not a court proceeding. And therefore, matter of jurisdiction is a court requirement and it's not applicable in a non judicial, non adversarial investigation of the Commission of Human Rights. And I hope that your respect for the Commission and Human Rights is also a reflection of your respect for human rights and human lives. And I believe that this is really Shell's opportunity to demonstrate its leadership among carbon majors. To be honest, Filipinos have their lives to lose to climate change and what has Shell got to lose by showing up in these hearings and participating. So we sincerely urge you to reconsider. Thank you. Thank you very much for your comments. And thank you for making the trip here and having the courage to voice to us your points of view. I'll assure you will take them very seriously. And believe me, we have the same goals. We just have to find the right way to get there. Thank you very much. Number 2? Dear Board, good morning and good afternoon actually. My name is Simon Rendewink. I'm an organizational psychologist and investor. And I have a question specifically for Mr. Weyers, if that's possible. I would like to ask you, what is the exact contribution of replacing oil by natural gas to total greenhouse gas emissions when you include emissions from leakage of methane? That will be my question. You want Mr. Wires to answer that question specifically? If that's possible, please. Hans, would you like to answer that question? I don't think I have an alternative unless you stop me from doing it. I would refer to the answers just been given by Ben and by our Chairman, which is that there are indeed in certain instances leakages of methane that would negatively impact on the environmental performance of gas. But there are a lot of technologies and a lot of processes to actually manage that and Shell is very committed to reduce that and to control the emissions of methane and committed also in cooperation with other companies to actually manage that risk. It is an important issue. It has to be managed and there is policies in place to do that. Fully support Hans is your answer. Thank you very much. Number 1? Mr. Chairman, my name is Sandeepen. I'm a Private Shareholder from Amsterdam. I want to make some remarks, and I have only one question for you. If you do agree, I'd like to continue with that. I thought there was a very nice introduction provided by Mr. Norden. Let me re emphasize that I'm here as a shareholder. I'm particularly interested in the future of the company, profit per share and the share price. And this morning, I'm facing all kinds of environmental organizations with all due respect, that's not my cup of tea. And once again, Mr. Ambon Burden, my compliment for your introduction. I now have a question, a very brief question. If we look at the following page of the annual report, the page on the balance sheets, no number given, then you refer to shares held in trusts. So those are the shares held in a trust portfolio. Well, if I remember my bookkeeping lessons correctly, that's the case. Why do you have so many shares there? I mean, that's larger than the number of issued shares. Thank you. Thank you very much for your question. Can I repeat the question? Excuse me. Can you also refer us to exactly which page it will help us to make the answer more specific? Page 119. You may get a note, 22, but that doesn't disclose much for me. Sir, you're referring to Note 22? That's right. Okay. Your point was that those are material? This is part of our corporate structure? I guess so. I continue with that, madam. Or French, if you would like. Why you do hold so many shares in trust? You have more shares in trust, if I look at this, then you have placed shares? That was my very simple and very concise question. I want to make sure that I understand the question correctly. I think the note itself and the financial statements are relatively straightforward. So if you were to go to page 148, which then describes the nature of those shares and the basis for why they're in the trust. So the share based compensation that's reflected? The same thing you say almost up to date. 148. But I'm also happy for one of us to spend some time to walk through it with you, if that's helpful. That would be okay. We'd be glad to take you through. Okay. I believe here is the answer, but right after the meeting, Jessica will be available to be able to deal with you. Correct. Thank you. Thank you very much for your question. We appreciate you reading the annual report with such depth. It's very much value. We have now completed all the questions on Resolution number 1. There will be a chance to vote for those on your white proxy as you leave. I believe if all works well, the votes that were turned in before the meeting started will be shown on the screen behind us. Can we show the votes on the screen behind us for Resolution 1? Thank you very much. We will now come to resolutions 2 and 3. They are ordinary resolutions for the approval of the Director's remuneration policy and Director's remuneration report, which are on pages 82 to 103 in the annual report as described. Are there any discussions on these two points? Number 1? Thank you very much, Mr. Chairman. My name is Paddy Briggs and I worked for Shell for 37 years. I'm now a Shell Pensioner. Since I retired, I've been active in the interest of my fellow Shell Pensioners in various voluntary capacities, including 4 years as a trustee of the Shell Contributory Pension Fund in the UK. I'd like to place the issue of RDS director remuneration in a broader context than just that of performance and rate for the job. As a pensioner and pensioners representative, I would assert that we are stakeholders in the company and potentially valuable promoters and defenders of the Shell brand and what it stands for. I find it difficult to defend the extraordinarily high levels of compensation received by the directors of the company. The high priced help has become very high priced indeed. But that is not my principal reason for speaking to you today and for seeking an answer to a question. I'm here because it seems to me that when you pay your Chief Executive nearly €9,000,000 for 1 year's work with the suggestion that this could burden with bonuses to almost twice that figure, you need another context in respect of your discretionary expenditure choices. One such context is your 29,000 member pensioner community in the UK. In 2016, we received an annual average pension of around 16 £1,000 It may surprise you to know that most of us managed to live quite well on this modest amount. This is not a complaint. The Shell Pension Funds exist to pay our pensions from their resources. However, Shell in the UK has always taken a view that it has a duty of care to its former employees, which goes beyond what the pension funds are obliged to do. There are various ways this has been done. I would like to draw attention to 1. The decade Shell in the UK has funded and supported managerially an activity called the Pensioner Liaison Representative, PLR scheme. Some 40 ex employees known as PLRs in return for a notional salary and expenses provide support to the 29,000 pensioner community. This includes home visits, which have helped to identify problems that individual pensioners may have. Some of these pensioners are in poverty and Shell has a charity to help those who are PLR identifies as being in financial need. It is a wholly admirable activity and one that Shell can be proud of. It costs in total a little under £1,000,000 per annum to run around oneten the Mr. Von Burden's annual compensation. At the end of last year, as far as a review of expenditure in the UK, especially discretionary expenditure, Shell similarly decided to stop the PLR scheme, saving £1,000,000 by withdrawing 40 people from pensioner liaison work and making them redundant. One of the reasons given was the need to adjust to the reality of a lower oil price. I note this reality appears not greatly to have affected directors' remuneration. Discussions have been underway between pensioner representatives in the company to try and find a way to plug the gap caused by the precipitous removal of the PLR scheme. But I would ask this meeting and the RTS Board whether they truly believe that canceling this scheme, which costs Shell just some £35 per pensioner per annum is justifiable in the context of the very high levels of director remuneration this meeting is being asked to approve. And I would ask whether Shell's off declared gratitude to its former employees, pensioner, stakeholders is so much pie in the sky or flower pool as you might say here. Thank you for your comments and we care greatly about our pensioners. They're very important. Long employment with Shell is highly valued. The Board hasn't reviewed the specific action you're talking about. We'll take it away and take a hard look at it. But please make sure we have your information at the front of the desk out here for information so we can follow-up with you. Thank you very much. Other comments on Resolution 2 or 3? Number 1? Good afternoon. Jeanette Phillips, shareholder. Just a quick question from me. I appreciate that in the remuneration policy, you've gone some ways to include the greenhouse gas weighted target, which is a good step. But obviously, this only covers Scope 1 and Scope 2. So it's not really linked to the wider strategic changes, just focused on operational emissions. So my question is whether Shell would go further to incorporate these more strategic long term changes about changing your portfolio composition into the annual bonus in future years? Thank you. Thank you. Mr. Quasterly leads our remuneration committee and has included that aspect. Would you like to comment, please? Yes. Let me briefly comment on that. Thank you. We firmly believe that remuneration follows strategy and not the other way around. So we don't try to drive the strategy through remuneration. We try to support the implementation of the strategy. And in that context, we have made it part of Christopher and Bertin's personal performance agreement, its individual performance agreement, to drive the New Energies business in Shell and make sure that through the establishment of that division, the board gets proposals where Shell attractively, profitably can invest in renewable energy more than it already has done up till today. And through that mechanism, it is included in the remuneration. When those activities become significant for the broader operations of Shell, then there is a moment where they could appear in the annual bonus scorecard. But the bonus scorecard pays for the things that need to be done this year by the broad majority of the Shell population because Shell only has one scorecard, which is a leading beacon for all employees in Shell as to what has to be done in the year at hand. I see no further questions on these two resolutions. Could we have the vote in the proxy, please? Thank you very much. We'll now move to resolutions 45, the appointment of Catherine Hughes and Roberto Stubala as directors to the company. Catherine will be effective June 1, 2017 and Roberto October 1, 2017. Their full descriptions of both proposed directors are in your materials. Catherine is a Canadian with French dual nationality with over 30 years experience in the oil and gas industry. Roberto, besides his very specific experience in Brazil and South America, a very important region to the company, he brings a career of banking experience in Brazil. Are there any questions on those two nominations for the Board? Seeing none, could we see the vote, please? Thank you very much. Resolution 6 through 15 are the nomination reappointment of the other directors to the Board. Are there any questions about resolutions 6 through 15? Microphone number 1? Yes. Thank you. Hello. I'm As a former CEO of Philips, a very impressive technology company who has made a giant move towards sustainability and circularity. What do you think are the most promising technological innovations for Shell in the net zero energy system as aimed for in the various climate agreements? I think we all like to know the answer. So what do you think, Gerard? I think we're not here at the moment to discuss more than what I think. What I think I discussed with my fellow directors in the boardroom, and that will be part of the input with the proposals we get from management to drive the direction forward for Shell in renewable energies. And at this point in time, we are at agenda points that deal with the reappointment of directors, and I think we should stick to that. Are there other questions on the appointment of directors? Seeing none, can we see the vote please? If we could turn to resolutions 1617, this is the appointment of Ernst and Young as our auditor and associated appointments. Are there any questions on those 1617? Seeing none, can we see the vote? 18 concerns the allotment of shares under UK Companies Act. The directors are subject to certain expectations. They're unable to allot without shareholder approval. This resolution, I think, is very clearly spelled out. Are there any questions on that before we I see no questions. Could we see the vote on number 18, please? Number 19 is special resolution on this application of pre extension rights. It is requires a 75% majority to pass and something that's necessary under the Companies Act. I think it's clearly described in a normal resolution. Are there any questions? Need to vote on number 19, please. Number 20 is the authority to purchase our own shares under at least number 20 that's required and we will guarantee you we'll be very prudent in exercising that right, but it's a part of our overall strategy. Are there any questions on number 20? Seeing none, could you see the vote on number 20, please? Number 21 is a shareholder resolution that Mr. Mark Von Ball has put forward and we would like him to have the Mr. Chairman, Mr. Van Buren and Board, thank you for your very extensive answer to our resolution. This points out how important you think this issue is. We also like to thank the team of the secretary for helping us with the paperwork of filing this tabling this resolution. And I'd like to address the shareholders, my fellow shareholders. Good to see you again. This is the first time we're here. The question today is, are we the last generation of shareholders in Shell? Or will we, shareholders, give Shell enough support to change course to make sure that there will be a next generation of shareholders in Shell, that Shell stays a world class investment case. The Paris Climate Agreement will have a huge influence on the future of all companies, in particular, energy companies. Therefore, the resolution states, in short, shareholders support Shell to take leadership in the energy transition to a net zero energy system. And therefore, we request one simple thing from Shell to set targets that are aligned with the Paris Climate Agreement. In short, the resolution simply asks Shell to commit to the Paris Climate Agreement. It's up to the management of Shell to set greenhouse gas emission reduction targets and to develop activities to attain these targets. The resolution is fully agnostic as we call it with respect to business models and technology. Support of the VEB, the Dutch Association of Private and Institutional Investors shows that participating in the energy transition is much more than a legal or moral obligation. It's simply the best strategy for long term shareholder value. Therefore, we hope that the Board of Shell would welcome a shareholder resolution that expresses shareholder support for a long term strategy. But by advising its shareholders to vote against Resolution No. 21, Shell is chosen not to commit to the Paris Climate Agreement yet. As of May 2017, 195 countries have signed the Paris Climate Agreement. But Shell, bigger than half of the countries that have signed the Paris Climate Agreement, doesn't want to set targets that are in line with this agreement. And the goal again is limit global warming well below 2 degrees. But we have not lost faith in Shell. In response to Shell in its response, Shell writes, we believe we are unique in having a broader set of business opportunities business opportunities than any other company in this sector. We fully agree. This is why we started our mission 2 years ago at Shell's AGM when we said on behalf of a few 100 shareholders, imagine Shell putting its brains and billions behind renewables. 2 years ago 2 years later, we say this on behalf of more than 3,000 shareholders. And Shell has taken promising steps. Shell stopped drilling in the Arctic, stopped exploiting oil sands, planned to build a wind farm in the North Sea, expressed support for the Paris climate agreement and established a new energy division. And I know this is the most popular division in the company, especially among young employees of some who have joined follow this. Unfortunately, when we look at the investments, it's just a few $100,000,000 and that's less than 1% of the total investments of Shell of $25,000,000,000 But today, we as shareholders can show Shell whether we mean business with climate change. Of course, acting on climate change is a moral and legal obligation. But as shareholders, we are convinced that changing courses is 1st and foremost a business opportunity and a way to avoid financial risks. According to Carbon Tracker, much quoted, Shell runs the risk of losing 1,000,000,000 of dollars in stranded assets. So today, Shells will decide whether they will support Shell in the energy transition. The percentage of votes that the resolution will ultimately receive depends on how well informed institutional investors are and how consistent they are with their own policies. We like to thank MN, Aktijam, Blue Sky Group and all other others in advance. For example, the policy of Dutch Institutional Investments says, we urge companies to provide an overview of the efforts to help deliver the goals of the Paris Agreement. This writes the representative of Dutch institutional vessels, Umeidion. Today, shareholders have voted for Resolution No. 21 will give Shell and the other oil majors a strong signal. We need you to change. If Shell and the oil majors do not change, they will go bankrupt and make large parts of this brands unlivable for future generations. In Shell's words, we hear a lot that you are truly concerned about climate change and you are truly motivated to be seen as a force for good. In Shell's deeds, however, we missed 3 things. And this is commitment to Paris, imagination of what the energy system could be like and also a sense of urgency. We hope today, shareholders will give Shell a strong signal to commit to the Paris Climate Agreement so Shell can be a force for good. This is a resolution of optimism, a resolution of faith. To quote the resolution, we encourage Shell to set targets that are inspirational for society, employees and shareholders, just allowing Shell to meet the increasing demand for NSE while reducing greenhouse gas emissions. Dear shareholders, in the coming decades, the next generation will ask us, You knew there was a global problem, and you also knew there was a solution. What did you do about it? Your answer could be, I was in a fortunate position to be a shareholder in Shell, and I supported the company to change the world by putting its brains and billions behind renewables and move to a net zero emission energy system. Shell is a strong supporter of the Paris Climate Agreement. Now the time is right for Shell to stop acting as a supporter and start acting as a responsible major global player. As we cast our votes, we had the opportunity to support Shell to commit to the targets of the Periscoll Ambit agreement. We are convinced that this is the right and only way for Shell to go forward in the future. And we are keen to know how many shareholders support Shell, take leadership in the energy transition. Thank you. Thank you very much for your presentation. It's appreciated by the room. Ben, would you respond please? Thanks, Shannon. Thank you very much, Mr. Van Balle for setting it out in the way that you did. As you indeed note, the Board unanimously recommends to vote against the resolution. And let me explain the reason for that. And it's not for the reason that perhaps you have displayed here. Now first of all, let's say that portfolio of activities, so selling assets as we are also doing, they can make a significant difference. But they only make a significant difference perhaps to our own portfolio. They don't necessarily improve the overall landscape. For instance, divesting energy intense operations may reduce our emissions, but actually doesn't impact the overall emissions in the case that these assets continue to be operated by someone else, if they're better than mine, of course. But we should continue to discuss how best we can reduce the emission intensity within our company. Now the targets that your organization follow this asks for and not least the inclusion of Scope 3 emissions. So these are the emissions of our customers, people who fill up at our retail stations. That actually that Scope 3 emission limits our ability to participate in the energy system and actually also limits our competitive positioning. And I also think that by targeting a single actor and even though we are a large company, we are a tiny company in relation to the overall energy system. We are not going to have a quicker transition. The only thing that will happen if we would indeed implement the resolution as you have recommended is that we will have our competitors benefit and it may actually have an adverse effect on greenhouse gas emissions. There's a slide coming up here. But if we take 1st of all, contrary to your assertion, the fact that we do not want to have an absolute emission target in the way that you have proposed does not at all mean that we're not supporting Paris. I hope if one thing our shareholders here have come away with a clear impression that we are committed to Paris, that we are doing many things in support of Paris and that we will continue to do that including having a dialogue with our institutional investors or what else we can do. Now you say we like imagination. Well, I urge you again to read this document. Actually read it Mr. Van Bau and you will see there is plenty of imagination on how we envisage the world to look like in a net zero emission scenario. If you look at commonly published scenarios by institutions such as the Potsdam Institute For Climate Impact Research and MIT, they indicate that roughly speaking and I said this earlier on, in order to limit the temperature rise to 2 degrees C, we need have net zero emissions by around 2,070. And if we talked about the 1.5 degrees C, the sort of strong ambition that Perus put out there that would require us to get there already by 2,050. And then after 2,050, we need to have negative emissions. So from 2,050 onwards, we need to take CO2 out of the atmosphere and actually store it underground. Now we have for a long time said that one of Shell's ways to help address this challenge of climate change is by providing natural gas as a substitute for coal or for heavier fuels. And with our BG acquisition, we have given ourselves the additional scale to do that. There's a number of examples on the slide and I will leave the slide on. So take some time to take them in. So all these examples on this slide are actually activities where we reduce greenhouse gas emissions against the alternative. So these are things that we do that reduce greenhouse gas emissions. And therefore, there would be good things to do. That's why we are doing them as well. The only problem with these four things is that they actually increase our emissions. So while it is good for the world, it would go against the spirit and the letter of your resolution. So if we had a resolution like this, we would be disinclined. As a matter of fact, we would be legally compelled not to do these types of things anymore because we would be compelled to reduce the emissions of our customers. And that's why we think that the resolution is an unreasonable ask. The only way we can reduce the emissions of our customers, the Scope 3 emissions that you referred to, is to reduce the sales of our products. That's the only way we can do it. At best, this will mean that our customers will just fill up at another petrol station of a competitor. But it will also mean in some other cases like for instance the example of selling gas into the power markets of Pakistan that we will perhaps prolong the use of coal and push customers away from the alternatives that we propose, which are cleaner alternatives. So in this case, we would encourage the world to burn more coal. Now that can't be for the benefit, and that's why we are against the specifics that you are proposing. Now we believe that we have a strategy that will allow us to navigate the energy transition successfully. So if indeed you are worried that we will become a dinosaur company of the past, I think we have everything within our means to navigate this transition successfully and indeed come out as a winner as we adapt our portfolio to this evolving energy system that we will see evolve over the rest of the century. But we cannot shape as a 0.25% player, we cannot shape the energy system on our own. We can influence government initiatives. We can influence policies. We can help accelerate the transition. And we can indeed make investing in the transition a commercial proposition because of the policy changes. And that's exactly what we are doing. And these are the sensible things that we can do in order to show our commitments to Paris. Now so we will undertake and I will be very clear on this and I have been very clear all the way during my tenure and I will continue to be so in the rest of my tenure, we will undertake that the actions that we believe are best equipped for us to drive this transition. And we will undertake to report out how we are doing on this. And we will do this together with the work that we are doing on our assets, the portfolio choices that we make. And we will do this together with you, our shareholders, to assess whether we are on track and whether we are living up to the spirit of Paris. Now we've received a lot of input from many of our institutional shareholders in the run up to this AGM. And we agree that our strategy and our approach needs to be transparent, as transparent as questions along that line. Now we are also in discussions with, as I said, governments. The task force for climate related financial disclosures. And many of you, of course, also have your own initiatives as institutional investors and stewardship interests in this area. And together I hope we can work out what would be a sensible framework that will show enhanced transparency that will demonstrate without a doubt that we are living up to the spirit of the Paris Agreement. A framework that encompasses risks and opportunities and issues on portfolio resilience through debt energy transition. But don't expect that the complexity of this system can be boiled down into a simple numerical target that you are asking for. So my commitment is that following this AGM, we will discuss the best way to take this dialogue forward with our institutional investors to deliver this world class investment case through the energy transition. And I strongly believe, I say this again, that our ultimate objectives are exactly the same, finding ways we can contribute to the energy transition while also ensuring the success of your company. And with that, Jed, back to you. Thank you, We're ready to take questions on this resolution. Microphone number 1. Would you like me to respond to this or later on? Why don't we take the other questions and you can have a chance at the end. Number 1? Good afternoon, Mr. Chairman. My name is Sylvia Van Waver and I'm representing today the asset manager Robico and the insurance company Aegon. Well, Shell has just received a resolution by FollowThis, a group of Shell shareholders that support Shell to take leadership in the energy transition to a net zero emissions energy system. And this shareholder proposal requests Shell to publish company wide greenhouse gas emission reduction targets that are aligned with Paris and more specifically to Scope 1, 2 and 3 emissions. The shareholder proposal has contained contains a number of elements and has raised a lot of discussions among the institutions I represent. And we consider our voting statement here before you. We have had several meetings in the past. We both follow this, but also with Shell Board and Management. We've discussed the shareholder resolution in full. And our analysis has come up with the following. For many years, the EU median participants have encouraged Shell to not only report on greenhouse gas emissions, but also to establish group wide operational greenhouse gas reduction targets. And also despite these years of engagement, we find that Shell does not show enough progress in formulating these group wide operational targets. We have evaluated this analysis. We've discussed it amongst the EU media members, and this has led to a range of voting outcomes. Some institutions have voted for, some have abstained and some have voted against or are doing that at this very moment. And the main reason for voting for or abstaining on the shareholder resolution is that investors are discouraged by Shell's reaction to follow this statement. For this reason, Aegon is abstaining on this shareholder resolution. At the same time, Robeco has decided to vote against the shareholder resolution. Main reason for this is that we consider that the emission reduction target on Scope 3 is a bridge too far. The carbon emissions from the use of Shell products by consumers and clients are outside the managerial scope of Shell. And reducing those emissions could seriously impair the business and reduce the necessary room for you to maneuver for playing an active role in the energy transition. Shell's ability to produce solutions for Shell's clients to implement the Paris agreements are seriously being hampered by a reduction target on Scope 3. However, having said this, we have a strong and urgent message for Shell's Board. We think still that Shell has not shown enough progress in formulating a long term vision on the transition towards a carbon neutral economy and on adopting group wide targets on operational emission reductions. Investors simply need a clearer statement on this specific subject from Shell, and we expect the company to show us this clear description of quantifiable time bound sustainability goals and ambitions. In this regard, and you already mentioned it, we particularly would like to recommend you to take into regards the recommendations of the Financial Stability Board's Task Force on Climate Related Financial Disclosure, the TCFD. They will soon be finalized, we expect, and we particularly ask Shell to take their recommendations at heart and embrace them wholeheartedly. With that, I would like to end this voting statement. I hope it's clear to you that we expect the company to be more proactive in future on setting targets on Scope 1 and Scope 2. Thank you very much, Chairman. Thank you very much for your clear logic and reasoning behind the voting. We appreciate you sharing that with the whole room. Number 2? Good afternoon. My name is Jagz Malia. And for the record, I work for APG Asset Management. We also represent ABP, the large Dutch state pension fund. And before I read my prepared statement, which has a lot of overlap with what Silvia just mentioned, I just want to go off piece and say, Chad, thank you very much for proactively reaching out to the investor community at an early stage to let us chip into the debate. Thank you. On our vote in terms of Resolution 21, before I get into that, I want to say my job as a portfolio manager is to provide decent investment returns, so I can get a decent pension for our clients and also doing that in a responsible manner. One aspect of responsible manner would be our commitment to reduce our portfolios, Scope 12 carbon emissions by 25% by 2020. We encourage all of our companies, including Shell to work with us on that goal. What I want to say is we, a, really respect and appreciate the changes that Shell has demonstrated since our last AGM and the one before that. I won't list everything here, but it's moving in the right direction for what we've asked for. In terms of Resolution 21, I need to in my job look at the details as much as the direction of the resolution. So in terms of agreeing with our goal to move towards climate COP21 Paris climate change agreement. In the details, as you've mentioned in your response to the resolution that Silvia has touched, to put limits on Shell's Scope 3 emissions would limit your ability to use gas to push coal out of the energy mix. And we really see that as one of your core strengths. So to cut a long story short, that's the main reason we're going to vote against Resolution 21 today. Thank you. Thank you very much for sharing your point of view. It's much appreciated. Number 1? Thank you, Mr. Chairman. My name is Peter von Stein. I work with PTGM, and I speak and vote on behalf also of one of our largest clients, which the pension fund for the health care sector in the Netherlands. Also, I'm going to make some statements, which are repetitive of what's already been said. Highly appreciative of the constructive dialogue that we had in the last couple of months, years about this important subject. We do acknowledge the efforts of Shell to contribute to the shift to cleaner energy, and we appreciate the steps taken to improve reporting, and we think Shell is actually leading in this sector. However, we also noticed a lack of corporate greenhouse gas reduction goals despite multiple demands made by several investors including ourselves. For Scope 12, this is for us an issue, especially since like ABP, our large client also has clear reduction targets for their for reducing the emissions of their investment portfolio. It is therefore that we regret the rather negative response of Shell to the resolution, focusing very much on the inability to achieve and to commit to these formal Scope 3 emissions. I think this response doesn't do justice to the spirit of the proposal. Now we support the spirit of the proposal. However, as like other investors, we also understand the difficulty to commit and to achieve to these formal scope 3. We do understand why you are this negative. So we cannot support this proposal. However, we want you to really acknowledge the urgency and the necessity to provide us with concrete targets to give insight into the direction and the pace of your contribution to the energy transition. It's therefore that we also do not follow your advice to vote against it. So we chose the middle way and we withhold. We vote withhold. And we do welcome your invitation to continue the dialogue on this important matter, and we would like to stress 3 4 points. 1 is, we would like you to develop corporate emission targets for Scope 1 and 2 before the coming AGM. 2nd is develop targets to provide us guidance with the pace and direction of your role in the energy transition, for instance, by setting long term directional targets for your energy mix, leverage these targets to for prevented emissions throughout the chain of throughout your value chain. 3rd is develop a program to work preferably together with your peers on how to reduce the emissions of your customers. And the final one is disclose the assumptions underlying the assumptions in the scenarios that are underlying your decision making. It's a plethora it's a wide range of scenarios, and we would like you to be more specific on what it is that you take into consideration in your decision making. Thank you. Thank you very much for your very studied comments and suggestions. We'll take them under advisement. Other comments for number 1? Yes. Sorry. My name is Farida Lindemann, and I work for a 3rd party asset manager and an investment partners. We support already some of the statements that have been made earlier by the other institutional investors and the statements made by IGCC, but we would like to make a statement on our own voting decision. We acknowledge the difficulty of the climate transition for the company and also the targets on Scope 3 are challenging to set for you. We do believe, however, that Shell can disclose the targets on Scope 1 and 2 emissions. And we also see it as a missed opportunity that you have not committed to do so in your response to this resolution. We will abstain on this resolution, thereby sending the signal that we do not fully support the resolution due to Scope 3, but we would like to see more commitment from the company going forward. Thank you. Thank you very much for your comments. We fully understand. Are there any more comments or questions on this resolution? Mr. Chairman, I'm Fred Heinewin. I'm Private Shareholder Living in The Hague. In my opinion, it goes miles too far to demand from Shell at this point already an elaborate plan in order to diminish the emissions of fossil energy. Because one very important thing has been forgotten and that's the situation of the science in the future. Nobody knows what will be invented the coming certain years, which there still will be quite a huge demand for fossil energy, coal as well as oil as well as natural gas. There is a proverb that says, the demand was confirmed, the adventures will follow. This always has happened during the history, but the dilution of Paris is indeed is useful, but to elaborate it in detail that goes much too far as nobody knows what will be invented during the coming certain years. During the past certain years, there has been more invented than all the years before. So in my opinion, I support the opinion of Shell and I will stay to it. Thank you. Thank you very much for your comments. Are there any other comments, suggestions? Mr. Van Baal, did you want one last statement? Yes. Thank you for a few last remarks. First of all, thank you to all the institutional investors who voted for a resolution and also the ones who abstained. That's also a very strong signal. And also thank you to others for giving Shell the real support to really change course. 3 remarks. First of all, on the flexibility on setting targets. In the resolution, we've given you full flexibility of how to set these targets. So if one of your targets would be we're going to replace an X amount of coal by an X amount of natural gas, that could be easily fitted in the targets as long as they fit with Paris. 2nd, the whole world has to go to 0 on Scope 1, 2 and 3, so why not Shell? And last remark, you are truly the most innovative company in your sector. And again, I hope shareholders will give you the sign that they trust you in doing that because apparently we have more trust in you than you have in yourself. Good luck. Thank you for your comments. Bill, would you like to respond to any other comments from the floor? Yes, I would like to. I think it's maybe to reiterate a few points. I think what comes out of this discussion today is that this is a complex matter. I have no doubt that indeed the resolution and all the sentiment behind it is extremely well intended. And as a matter of fact, it's exactly the same sentiment that also drives a lot of the attitudes and decision making within our company. I don't think we have any disagreement on where we need to go. We don't have any disagreement on the transparency of disclosing it all. And I sense there is not a lot of disagreement also on the appropriateness of the actions that we are taking. What we seem to have a disagreement on is how we set targets and measure progress against it. Now the let me explain just one more time. The issue that we have with targets once adopted here is that they are for real. This is not a birthday party where we just make some sort of promise. This is actually a serious investor resolution that we are legally obliged to comply with. So the whole idea that it's okay if we reduce somebody else's gold Scope 3 emissions because we can still credit that to our Scope 3 is not the reality. The reality is that Scope 3 emissions are the emissions from our products, not from somebody else's products. But having said all that, I also hear a lot of the debates about what about Scope 1, what about Scope 2, can you demonstrate a little bit more what you are doing. We hear a lot of good words, but we need to understand a little bit better what it is. Again, I will reiterate the commitment that I've made and that we have the whole management team and the board behind. We will continue to engage to find the right way to show not only that we are doing the right things, but that we are making progress with it and that there is a framework and a philosophy for measuring and holding the company to account. Then you can make up your mind whether you like what you see. What I cannot commit at this point in time is that we can boil that all down into a single target. So it will be a little bit more involved. But let's have the discussion on what it exactly is that you need. I understand for institutional shareholders, but also you are, of course, under a lot of scrutiny and pressure from your clients to demonstrate that you are holding a portfolio that is fit for the future and a portfolio that is compatible with what society desires. And therefore, I think it is also our obligation to demonstrate that you need to hold our share because we are doing just that. But let's find a way together then to demonstrate that this is the case. And let's have an open mind on how that works. If it can only be done with single numerical quantitative targets, then I'm afraid it will be a difficult discussion. But if it can be done in a way that nevertheless drives the right outcomes, then be my guest, we will get there. And we will commit a very significant type part of our Investor Relations program on social responsible matters just to this issue because I think it is the issue that defines our time and that will define our company. Thank you very much. Ben, thank you very much. I think that summarized in an excellent way the full thinking of the Board. And I think it's a very forward looking step at this subject and I look forward to seeing move forward. Linda, we're getting close to the end of the meeting. Well, the Resolution 21, I'm sorry. Let's vote for 21. Moving too fast. Thank you very much. Now Linda, we're getting closer to the end of the meeting. If you could tell us the procedures for voting. Thank you, Chairman. Happy to. Ladies and gentlemen, please cast your vote by completing your white paper poll card. If you agree with the resolution, please mark your X in the box marked for. Likewise, if you disagree, please mark an X in the box marked against. If you would like to abstain, please place an X in the box marked vote withheld. Please note that a vote withheld is not a vote in law. So of course, it will not count in the proportion of the votes for or against any resolution. The scrutineer will establish from the register how many shares you hold and we'll assume that you would like to vote all your shares in the way that you have indicated. If you wish to split your vote, please contact a member of staff up at the registration desk. If you have lodged a proxy form, you do not need to complete a poll card, unless your proxy is not present or you would like to change the way your shares are voted. Please remember to sign your card and date it May 23, 2017. If you do not sign your card, your votes will not be counted. Please deposit your card in one of the ballot boxes, which you see clearly marked as you leave the auditorium. And these boxes will be removed in 20 minutes or earlier, if I am satisfied that the voting process has been completed. The final results of the poll votes will be sent to the Amsterdam, London and New York Stock Exchanges and shown on the Shell website tomorrow or later today if time permits. So thank you very much for your time and your votes and back to you Chairman. Linda, thank you very much. I'd like to thank every shareholder and proxy that's here today for the highly respectful way that we have dealt with the topics at hand. This has been a very constructive dialogue and I'm sure your entire Board of Directors will take into account what we've heard here today. We're now coming to the close of the meeting. I do want to point out to all shareholders that Thursday in London, the CEO, the CFO and myself will be there to have a dialogue with UK based shareholders. And those that could not be here in person, I hope that you'll find that very useful. I now want to formally close the meeting. Thank you very much.

• Slides