Shell plc (SHEL) Earnings Call Transcript

So good morning and good afternoon, ladies and gentlemen. Before we kick off meetings at Shell, we always hold safety moments. And in that spirit, I'd like to note that our Chief Executive, Ben Van Beurden, is not in attendance today. And of course, while his attendance had been planned, he has unfortunately taken ill. Now he has tested negative for COVID, but in an abundance of caution and in line with our priority interest of safety first, we have prudently determined that it's in our best interest and in his interest and our attendees' health not for him to attend either physically or virtually. So I think given that, which, of course, was a recent development, it's even more important today that our question-and-answer session focuses on the business of today's meeting. So in that vein, please understand when I emphasize that questions should be kept short and to the point. And likewise, on our side, we'll strive to keep our answers responsive but crisp to ensure efficiency and to allow as many questions as possible on the subject of the meeting. Sorry about this. This is on, and I'm getting the translation into my -- I need just -- can you just take that? So sorry about that. But for those of you who do not know me, I'm Andrew Mackenzie. And as Chair of the Board and of this meeting, I'm delighted to welcome each of you to the 2021 General Meeting of Royal Dutch Shell plc. So first, just allow me to describe the overall process for today's meeting. After I formally open it, we'll move to your questions. And following that, we will conclude with the voting outcome. Now for those shareholders wanting to ask questions, if you're participating online, please refer to the guide on the Lumi platform. If you're here in the room, please see one of the ushers at the two question points. When asking questions or making any comment, please do state your name and the name of your -- of the organization you represent, if indeed there is one. So Tjerk Huysinga is our Executive Vice President of Investor Relations, and he will facilitate the question portion of the meeting today. He'll read out all the questions submitted on the Lumi platform. Now some questions may be moderated just to avoid unnecessary repetition and to make sure we have an orderly meeting. So as I was hinting, this meeting is designed to focus solely on the formal business we set out in the Notice of the Meeting. We won't have any presentations, so let me remind you of the proposal. The Board has proposed that we change Shell's Articles of Association in order to simplify the share structure of Shell. And the core proposal will enable Shell to change its dual A/B share structure into a single line of shares and align its tax residence with its country of incorporation in the U.K. And this is a simplification that's designed to make Shell more competitive, to accelerate distributions to our shareholders and to speed up our transition to a net-zero emissions energy company. Through all this, of course shareholders will retain all the rights in Shell that they do today. The company's shares will continue to be listed in Amsterdam, London and New York, and they will have FTSE U.K. and AEX index inclusion. Shell's corporate governance structure also remain unchanged other than the location of its Board and Executive Committee meetings. Your Board believes that this proposal is in the best interest of shareholders. And we strongly recommend all shareholders to vote in favor of the changes to the Shell articles. Now so far, we have received positive feedback from our institutional shareholders, and the business case does seem to be well understood. But having said that, we can address and we'll address potential outstanding questions that you may have today. If the proposal is approved and after consultation with the relevant Shell staff councils, the Board will make a final decision on whether to proceed with the simplification. And we will aim to execute this simplification soon thereafter. Now with that introduction, I confirm that we have a quorum present to now declare the general meeting formally open and suggest, with your permission, that the notice convening the meeting is taken as read. In accordance with the company's Articles of Association, and as stated in the Notice of the Meeting and circular, the meeting will be held in English. For those watching via the Lumi platform, voting will be open throughout the meeting, and it will remain open for 15 minutes following the conclusion of the meeting. Once you've voted, you can change your vote. But when the voting closes, then it's your last choice that will be, of course, submitted. In accordance with the company's Articles of Association and as contemplated by the Notice of Meeting, I hereby call for a poll to be taken on the proposed resolution. And I'm appointing the company's registrars, Equiniti, to act as scrutineers. And I hereby propose, therefore, the resolution that is set out in full in the Notice of the Meeting and circular. The resolution is proposed as a special resolution. And therefore, it requires at least 75% majority of the votes cast to be in favor in order for the motion to be passed. So the poll is now open. [Voting]

Before I introduce the other Board members who are with us today, please remember, for those shareholders wanting to ask questions, if you are participating online, do refer to the guide on the Lumi platform. And if you're here in the room, as I said, see one of the ushers at one of the two question points. To allow sufficient time for other shareholders wanting to ask questions, please keep your questions and comments short and to the point and relevant to the business of today's meeting. And we'll do the same with our answers so we can hear from as many people as possible. For those choosing to ask their question here in person or via the teleconference facility, if I believe your question or statement is excessively long, please accept that I may ask you to bring it to a close. I do intend, though, that, where possible, all questions or comments of a similar nature will be grouped together. Grouping questions and comments in this way can help avoid repetition, and it can make sure that we address as many questions as we possibly can. I also, however, request your patience if there's a lot of interest in one particular issue where we've grouped the questions. So as Chair of the meeting, I have a duty to make sure that today's proceedings are conducted in a proper and orderly manner. And of course, I'll do my utmost to make sure that all shades of opinion are given a fair hearing. But to help me fulfill these responsibilities, I would ask that you respect our procedures and the order of the meeting. For those watching the meeting via the Lumi platform, a copy of the Notice of the Meeting can be found under the Documents tab on your screen. And for those watching on the webcast, it can be found within the General Meeting section of our website. Now the nature of this meeting is very different to our usual Annual General Meeting, where we normally have all our directors joining us. But those not on stage with us today have all contributed -- each contributed fully to the discussions that have led us to this general meeting. And they, in addition to those on stage, unanimously support the proposal, and many of them are following the meeting via the website -- webcast. However, having all directors join us here today when they have no formal role in today's proceedings would, I think, go against the messages we provided to our stakeholders regarding physical attendance and one which we've put into practice with the Chief Executive. So I am today joined by our Chief Financial Officer, Jessica Uhl, and our Company Secretary, Linda Coulter. Euleen Goh, our Deputy Chair and Senior Independent Director, is joining us remotely from Singapore. And as I noted earlier, we also have our EVP, Investor Relations, Tjerk Huysinga, who will be assisting us with the questions from those participating in the meeting remotely. So it's a pleasure to see that we already have a good number of shareholders joining us online and indeed here in the hall. And you may have read in the Notice of Meeting that not only is this meeting open to shareholders, but we also webcast the meeting. This opens the forum to the public and any other interested parties via the share website. So therefore, I -- we also welcome warmly those of you who are watching the meeting in this way. So we've now come to that part of the meeting where you have the opportunity to ask questions. If I could remind you to keep them short, preferably no longer than a couple of minutes, 1 or 2, so that we can get through as many as possible. And for those asking questions via the teleconference facility, I once again remind you to give your name and, if you represent an organization, the name of your organization when asking a question or making a comment. So with this introduction, let us move to your questions. Tjerk, over to you, please.

Thank you, Chair. We will start today with questions on the audio line. So operator, can I have your first question, please?

We will now take our first question from Sylvia van Waveren.

Good morning, Chairman. I hope I'm being heard well. My name is Sylvia van Waveren from Robeco. And today, I speak on behalf of a group of institutional investors, including NN Investment Partners and Mn. To start with, Mr. Chairman, I would like to thank management and Board of Shell for their ongoing discussions with us on several topics, including the energy transition, remuneration and other important matters. On the agenda today is the adoption of the new Articles of Association. The company will adopt these in order to facilitate the simplification. And it will lead to a range of changes, as indicated in your circular and during this -- today's AGM. We agree with you that a conventional single-share structure will enable Shell to compete more effectively. However, in this AGM, we would like to take the opportunity to make some reflections and provide you with our feedback around the following 3 topics: firstly, the share simplification; secondly, the energy transition; and thirdly, the Dutch heritage. So let me start with the Shell simplification. This is designed to strengthen Shell competitiveness and to accelerate both shareholder distribution and the delivery of its strategy to become a net-zero emission business. And our reflection is the following. From an economic and strategic perspective, the rationale for the simplification is clear to us. It will lead to greater flexibility for strategic portfolio changes that might be needed to deliver Shell's Powering Progress strategy and an acceleration in distribution by a way of share buybacks. However, the Board's decision to align Shell's tax residence with its country of incorporation in the U.K. instead of aligning Shell's registered office and corporate seat in the Netherlands seems to be mainly driven by dividend withholding tax consideration. And this leads to my first question. Has the Board, in its proposal to align Shell's tax residence with the U.K. instead of with the corporate seat in the Netherlands, considered or weighted other materials -- other material factors than dividend withholding tax consideration? And we could think of shareholder rights in the Netherlands versus the U.K., the inclusion in different European indices and also the impact of the Brexit. And by doing so, which factors were considered by the Board? And which factors could lead to change the Board's position in its final decision early '22? This come -- this leads me to my second important topic, the energy transition. You call it the Powering Progress strategy. It would strengthen the company's ability to rise to the challenges posed by the energy transition. And moreover, Shell assured us that the simplification will have no impact on legal proceedings relating to the climate rules -- ruling issued by the district court in Hague in May '21. And as we know, Shell has appealed against this climate ruling. The appeal court will review all issues raised by the parties in a process we call de novo. That means that both Milieudefensie and Shell may formulate new defense arguments, raise new issues and introduce new information. And our reflection to you is as follows. Our basic message that we have been articulating before and have articulated before to you stays the same. Shell has an important role to play in mitigating climate change. And it is of the utmost importance that the company is clear on how it aims to achieve this energy transition by showing plans, actions, targets and progress in the short, medium and long term. It remains, however, unclear whether any perceived inaction or insufficient action by Shell regarding new information can be sufficiently considered by The Hague Court of Appeal as Shell's corporate policy will no longer be the determined in the Netherlands but in the U.K. This leads to my second question. Can you please confirm to us that the simplification and the relocation will not have an impact on legal proceedings related to the climate ruling issues by the district court in The Hague in May '21 or any other legal proceedings currently in progress? And then lastly, my third point. And I'm not overbearing...

Okay. Sylvia, can I interrupt? Sylvia? Sylvia? You've been asking a very long question, and it's already way in breach of my suggestion of 1 to 2 minutes. A number of the members of the audience here feel that I'm not being very true to my opening statement. I wonder if we could stop there and take your first two questions. And maybe, if you have another question after other people have spoken, you can come back with that. Would that be acceptable?

That's fine. Okay.

Thank you very much.

Thank you.

Okay. So I'm going to answer your questions on -- basically on the drivers for simplification and, indeed, the moving of the tax headquarters to the U.K. And then I'll turn to your question on the impact, if you like, of the simplification on the Dutch court ruling. I'm going to -- I think I'll deal with the second one first, and then I will answer some of the simplification question. But I'm going to ask Jessica to perhaps add to my answer. So on the energy transition, look, thank you for your endorsement and encouragement of the aims of Powering Progress. It's a strategy that we're very committed to and very excited about. And we do think it cannot just lead Shell but actually the Netherlands and indeed the rest of the world to the kind of just transition that we talk about. The straight answer to your question is that we do not believe that anything that we are proposing has any impact on the judgment of the Dutch court. And I -- you're correct that we have appealed this judgment, but we're also making best efforts to comply with its expectations. And I think you will have noted that in our Q3 results, we laid out how we would cut our Scope 1 and 2 emissions by 50% by 2030 relative to 2016, which is in excess of what we've been asked to do by the court, and that we will continue to use best efforts to do the same thing with Scope 3. And this kind of improvement, it speaks for Shell, our mantra of continuous improvement. We set out goals, but we always try to improve on them. And I think you will see that as we accelerate into Powering Progress. And I do not believe that this simplification will have any impact on the court judgment, and it will, in fact, in our belief, accelerate our ability to move into the goals of the energy transition by thinking about some of the different ways we might restructure Shell more expeditiously than would otherwise have been the case. So on simplification, all the factors that you suggested we should consider about both collapsing to a single line of shares and also moving to the U.K. were fully considered. And we did proper cost-benefit analysis on every issue. And I can assure you that is not dominated by considerations about the dividend withholding tax. There are many factors that have come to play. The Board and management have looked at them from every angle, and we have concluded the course that we've laid out is unquestionably the one that offers the maximum benefit for the minimal cost or risk to Shell shareholders. But maybe, Jessica, you might want to add to that or not.

Thank you, Chair, and thank you, Sylvia, for your question, and it's very good to hear in your own words that you support the rationale for the simplification. In terms of the considerations, as the Chair has mentioned, we considered, I believe, all relevant factors over the last several years when looking for the best path forward for the company. And on balance, this is a decision that we believe is in the interest of our shareholders, first and foremost, and also in the interest of the company. A couple of factors I would mention. We are already a plc, and so moving the tax domicile from the Netherlands to the U.K. is a relatively straightforward set of actions. Whereas, had we tried to do the inverse, which was to bring the incorporation to the Netherlands, it is a much more complicated and complex set of actions that are required. And importantly, our shareholder base is predominantly in the U.K. And had we chosen to move to the Netherlands, there would have been negative implications for our shareholders. And that relates to the dividend withholding tax, which I'd like to make just a point of clarification. The dividend withholding tax on our dividends is a tax that affects our shareholders. This is not a tax for the company. It's a tax on our shareholders. And for our -- some of our U.K. shareholders, they are unable to offset it, whereas that's not the case for our shareholders here in the Netherlands. So had we moved here, there would have been a real material negative implication for our -- for many of our shareholders. And in addition, we would have -- likely have lost our indexation with the FTSE, which is significant for us as a company and significant for our shareholders. So there are a host of reasons, but the dividend withholding tax element is primarily a shareholder issue and not a Shell issue. What I will say is that our corporate income tax position we do not believe will change as we move from the Netherlands to the U.K. And if you look back in prior years, the amount of taxes that Shell pays, typically, on average, our effective tax rate is higher than the OECD average. So I'd just point that out. This is not about corporate income taxes at all, that we don't expect that to be impacted by this move. Thank you.

Well, thank you, Jessica. And thank you, Sylvia. And we can come back later to you with some of the other questions, but I'd now like to see if there are any other questions.

Mr. Chair, I will now go to another question, which was actually written in the Lumi platform, so I'll read that to you. And then we will go into the -- for some of the question points. So if people want to raise a question, they can walk up to one of the question points and then we'll come to you later. So first, we go online. This is a question submitted by Mn Services also on behalf of Pensioenfonds Metaal & Techniek (PMT). "We thank you for the discussion of the proposal in our recent dialogue. As investors with long horizon or assessment of the proposed move to the Shell -- of Shell extends beyond this meeting and beyond the implementation of the proposal. With this proposal, Shell wants to increase the speed and flexibility of capital and portfolio actions. It is the direction of the speed and flexibility that matters to us as long-term investors. We believe that Shell can and should play a leading role in the energy transition. When speed and flexibility are used to that end, we can be supported -- we can be supportive, sorry. In our view, this transition is only possible when Shell operates as a whole using the old energy to fund the transition to the green energy. We urge you to publish short-, medium- and longer-term carbon reduction targets that are in line with the 1.5-degree pathway. Do you share this vision for Shell?" Thank you, [ Martin Kalkos ], who posted this question by Mn Services. Back to you, Chair.

Yes. Well, thank you, [ Martina ] -- or [ Martin ]. Look, first of all, I appreciate your observations, if you like, on what I would call the sort of capital allocation process of the company. We've actually been very clear about this, I think, in the course of the last 12 months. And I think in doing so, we've very much increased the capital discipline that we as a Board and management now apply to the decision about how every additional dollar, if I could put it that way, is used for the benefit of the short, medium and long term in the way you described. And there will be absolutely no impact in many respects on that, if you like, that creed of capital discipline as a consequence of that. But you're right that within that, we can actually exercise that discipline with greater flexibility and probably greater power as a consequence of the simplification you proposed. I also acknowledge the comment you made about using old energy to fund the transition. And of course, there are different views out there, but we certainly are very sympathetic to that approach. But we'll listen to all views. And we do think for it to be a steady transition, that we have to slowly dial down the provision of the goods and services that our customers in Shell for over 100 years have depended us on through fossil fuel sources and dial up those from renewable or alternative supplies or indeed abating supplies, which actually give more and more of our goods and services with the same effect that you -- we've -- our customers have enjoyed for over 100 years but with less and less carbon. And we do indeed publish our short-, medium- and long-term carbon reduction pathways that we think are leading to a 1.5-degree pathway. That is part of Powering Progress. It was part of our energy transition plan that was approved by over 90% of shareholders at our last AGM. We've, of course, since improved on that, as I talked about in answer to an earlier question. And we will -- at our next AGM, which comes up in May, we will provide an update to that, an update on progress and, as I say, the extent to which this continuous improvement mantra at Shell could allow us to get, if you like, faster towards the -- to the outcome that would be best for a 1.5-degree pathway. And I absolutely share your vision, and I look forward to sharing that with you more as we come back in May.

Thank you, Chair. Let us now move to questions in the room. I think there is a question at question point #2. Why don't you start there?

My name is [ Robert Fagan ] of [ WeConnectU ] Public Affairs and Investor Relations. It's a pity that Ben Van Beurden is not here today, because Ben was -- in 1972, he was 13 years old. And at that time, the [ Realm Report ] was published. So we already knew 50 years that the Earth is going to the dogs, and Shell was really aware of it about 40 years ago. We are now in the middle of a climate crisis. COVID-19 is climate crisis. Shell is, within the oil companies, one of the greenest energy companies. And 1 million animals and plants will disappear in the coming years. And I advise you to work harder because you were working on hydrogen already 25 years and you're still not really upscaling it. So it's important to work harder. And I advise you to stay in the Netherlands because it's a wonderful, beautiful country and all the Dutch people are really close watching you. I'm worried about ABP, the Dutch pension fund, which withdrew shares of Shell. That's a very bad signal. And it's remarkable that now Shell is leaving the Netherlands, we have for the first time a sustainable advertising campaign. And I advised you already 5 years ago to do that and to become the main -- the strongest worldwide leader in the field of sustainable energy. Another advice is to create hydrogen oases in the Sahara and in other deserts worldwide with windmills and with solar panels because then you can upscale the production of hydrogen very cheaply. And you can ship it very cheaply with hydrogen big ships. Well, [ artist ] is due to climate change. That's the Dutch [ shoe ], and big problems. And probably as a farewell gift, you can gift them a huge amount to support artists. [ Artist ] is a [ shoe ] in Amsterdam and oasis, and it's a good signal if Shell helps it. Furthermore, we are creating Lightyear in the Netherlands. And that's a car of solar panels. Another suggestion may be to support that car which we are making. So there's a lot of work to do. And, well, the Dutch investors now have to go to London, and maybe it's a good idea to organize a trip the first 2 or 3 years so that we will pay, but that you organize it so that we can come to the next AGM in London. So all together, summarizing, please stay in the Netherlands. That's very important for you and for the Dutch people. And speed up the process you're in and taking the lead in sustainable energy worldwide. Thank you.

Well, thank you for your question. And we will stay in the Netherlands. I can -- we like the Netherlands. And I personally, as the Chair of this company, have a strong affection for the Netherlands. In order to make this company perform better for the Netherlands is part of the reason why we're making this change. I would remind you that we're only moving, if this were to happen and if you vote for it, the CEO and the CFO and the site of Board meetings and Executive Committee meetings to establish a single line of shares in a way that will allow us to be much more flexible and protect the interests of all shareholders. But we do expect that our engagement here in the Netherlands will show real leadership to the world about what's possible in the move towards a more sustainable energy future in the way in which you described. Just in the last 2 years, we've committed over $4 billion -- I think EUR 4 billion, excuse me, to energy transition projects here in the Netherlands, which we think will speak strongly to what's possible here, of course, but in the EU and in the world -- and worldwide. And of course you're right, it's important people notice that. And therefore, we are proud of our advertising campaigns. Now I can't speak to all the suggestions you make about where we might fund things going forward. We receive many ideas, and we're open to all. We have a very rigorous process deciding which way to fund. And as you know, we are funding considerably in the way -- in both solar power and in hydrogen, and we are very aware of the connection you described. We expect to invest in hydrogen here in the Netherlands and [ promise that ] going forward, as we've spoken about in the past. So yes, I think we are broadly aligned. And of course, we will make provision virtually for you to attend our AGMs in London, and we hope you can do that. And we would, of course, welcome you if you would like to come to London. I have one -- there's one part of your question I'm not able to address, and I should have given Jessica a little bit of warning on that, and that's your concerns about the Shell pension fund. Do you know that? Or is that something we need to go back to?

I believe that's in reference to the pension fund choosing to sell their shares. Is that correct? Is that the reference?

That's correct.

Okay. And so that's disappointing for us as well because we believe we are a responsible company towards the energy we produce today, that the world needs today, which is fossil fuels. 80% of all energy today comes from fossil fuels, and that fuels our lives today. And we're a very responsible operator of those assets globally and proud of that role we play in energy system. But importantly, we believe we're a leader in the energy transition. And if you want to be investing in companies that are going to make a material difference at scale and at pace, I think there's few companies that are doing as much as Shell is doing today. And our entire strategy is behind the energy transition. So I would have -- we prefer our shareholders to stay with us and particularly those that want to drive the energy transition. Thank you.

Yes, I'm aware of that issue. I just -- I thought it was something different. And I would just echo Jessica's comments that we believe that Shell is designed to thrive in the energy transition, to lead the energy transition in the way you described. And therefore, people should be proud to invest in us as a way of accelerating the energy transition. But clearly, not everybody sees that point, and that's why we need to advertise and do other things. But maybe we can have the next question.

Thanks, Mr. Chair. We're now going to go back to the phone. So operator, can we have another question on the phone? And again, as the Chair has said, can people keep their questions, please, brief so we have enough time to answer them? So operator, over to you.

Jasper Jansen, your line is open.

Hello. Can everybody hear me?

Yes.

Hello? Okay, very well. My name is Jasper Jansen of the Dutch Investors' Association. Thanks for giving me the opportunity to ask some questions. And let me start by saying that we will vote in favor of the simplification today as this is clearly in the best interest of all shareholders. However, we have 2 questions that are related to the potential dividend withholding exit tax. First of all, as you are well aware of, I can imagine, is that the proposed bill was amended on Wednesday and now works around some of the issues that were in place in the previous bill such as the potential violation of tax treaties. Could Shell comment on this new bill and the impact from a cost-benefit perspective that was done on a -- in an earlier phase? So are there any difference there? So that's the first question. And the second question is also related to the exit tax -- potential exit tax. And it is that end of the day, Shell basically stated that the likelihood of such a tax -- that such a tax will be incurred is very low. However, a worst-case figure has not been provided yet. So my question is, why isn't Shell disclosing this number? So the value of such a tax in a worst-case scenario. And basically, how could shareholder make an informed vote today if this information is not shared? So those are my 2 questions. Thank you.

Okay. Well, thank you for your question. I'm going to ask Jessica to handle the second question you asked. Let me refer you to, if you like, to the amendment that you spoke about in the Dutch Parliament on Wednesday. I don't think the view that we had in the circular has changed, that the Board believes there is considerable uncertainty as to whether the proposed bill will be enacted with or without the amendment and whether it will ever become law. And therefore, we still believe, given that very high uncertainty and relatively low probability, that the balance is still very much that it's unlikely that this will happen and cause an increased charge to Shell. And therefore, the benefits of this transaction still far outweigh the possible costs. And I don't think we've changed our mind on that. As regards to the reasons why we've not put sort of lots of numbers around it, I mean, part of the reasons, and Jessica will elaborate on that, is that there's a lot of unknowns here, there's a lot of uncertainties. And really trying to quantify things in the face of that is really extremely difficult to the point of misleading, in my view. But Jessica, maybe you could say some more.

Thank you, Chair. And the Chair's final point, I think, is a really important one, which is we need to ensure that we provide information to shareholders that we think is helpful. And given the degree of uncertainty with respect to the final form of the bill, whether the bill would be passed and then whether that bill would ultimately be deemed appropriate from a legal perspective and deemed valid, there's a high degree of uncertainty around. And so if you compound all of that, I think it's quite difficult to provide a range of outcomes that are easily understood and would be helpful to shareholders. What I'd also add is that these conclusions are based on very careful consideration that we've taken over months of review. And we've brought in expertise here in the Netherlands and we brought in expertise in the U.K. And of course, we have internal expertise as well from a legal perspective, from an accounting perspective. And it's based on high-quality advice and consideration that we've come to these conclusions, that providing any ranges at this point in time would not be necessarily helpful because of the degree of uncertainty, the number of assumptions that would need to be made. And frankly, it's not -- it would not be consistent with how we typically handle disclosure matters as a company when you have this degree of uncertainty. The important piece is what the Chair mentioned. In conclusion, we don't believe that this will ultimately stand as a valid outcome. And therefore, on balance, we think the benefits outweigh the potential costs.

Thank you, Jessica. Can we have the next question?

Okay. Mr. Chair. I'm now going to go online again because there are quite a few questions which are reaching us online. So if you -- if I may, I will -- going to do 2 questions online and then we're going to go back into the room. So the first question, Mr. Chair, is from [ Joel Turbin ]. "How will A and B shares be simplified when both trade at different prices?" We'd like to thank [ Joel ] for a very brief and concise question.

Okay. And maybe, Jessica, a brief and concise answer.

So two pieces to this. The first is that markets tend to be very efficient. And with the announcement in November, many of you may have noticed that the difference in price between the A and B shares collapsed and essentially became the same price more or less. Now that's -- it's moving around a bit day by day, but I think for the most part, the market will take care of this. And then in terms of the final moment that this will happen, should it get approved today and should the Board then choose to go forward, these types of transactions and movements with shares have been done in many different instances. There's other companies that have had to do similar things. It would take place over a weekend. And any final difference will be addressed through the logistics of how we actually execute and make all of the shares one class of ordinary shares. So I think the market will take care of most of it. The balance of it, though, we can -- we will rely on prior practices and ways of working. So I don't believe this will be an issue.

Okay. Let me do the next question online, Mr. Chair, if I may. This is more a statement which is talking about the future meetings, AGMs and EGMs. It's from [ Robert James ] and [ Michael Barnett ]. "May we have links to future meetings, whether AGM or EGM, by video or webcast or telephone? May we have online voting facilities during these meetings? I would really appreciate this." He has also provided us with a suggested answer, which is interesting. "We appreciate your feedback on the access to the meetings. This will be taken into account when considering how future meetings will be run." Over to you, Mr. Chair.

Okay. Well, I can agree with your suggested answer. I mean, of course, we are interested in people's inputs as to how we evolve the smooth functioning of EGMs and AGMs. And we will definitely think about the best way to do things ahead of our AGM. And any changes that you or others might have, please relay them to us because we're -- this is your meeting, and we want them to be a meeting that you feel is well run.

Okay. Let me now suggest we go back into the room. Please, if there's someone in the room who wants to ask a question. Okay, go ahead at question point #2.

Yes. My name is [ Ruben Heelings ]. I have two questions. The first one is, can you confirm that after the exchange of the instruments, the shares on the Amsterdam exchange will still be traded free of stamp duty? And the second question is about the options on the Amsterdam exchange. I contact the exchange, and they said they couldn't say any -- say what would happen to the options until they hear the decision that has been made. And for me and I think a lot of Dutch investors, it's very important what will happen to the options. Will they be exchanged one-on-one to the new underlier? Or will they be settled? Do you have any idea on that? Are you in contact with the exchange for this?

Well, I'm going to pass that to Jessica, but this might be something that Tjerk may want to comment on because he's probably closer to some of those conversations. But if you want to start, Jessica.

We do not expect any negative impact from a stamp duty perspective in any of the jurisdictions. And on the second piece, on the options, again, there should be no negative impact for our shareholders. So all of these things have been considered, and I'm not aware of any potential negative impact from a shareholder perspective or from an options perspective. But Tjerk, if you want to add anything to that.

No, I think we need to take it offline, and -- because I think the other point is, actually, we will work all through this when this vote actually has come and when actually people have approved it. And so the answer you've got from the AEX is logical at this moment because they can't actually talk about something which has not been approved and have not been implemented by shareholders or by the company. But by all means, we can talk later or you can send us an email, and then we'll deal with that in the coming days and weeks. So there's no question that we will not answer your question. Thanks.

Okay, yes. Thank you for your question. Thank you, Jessica and Tjerk, for your answers. So next question?

Yes. So let's go indeed into the room. And we welcome Mr. Van Baal at point #2.

Thank you, Tjerk, Mr. Chairman, members of the Board. Mr. Mackenzie, nice to meet you in person, finally. My name is Mark Van Baal, follow This. We are a group of green shareholders in big oil, and Follow This has supported Shell to drive the energy transition since 2015. Last May, our climate resolution, which supports Shell, to set targets, emission reduction targets, that are truly in line with the Paris Climate Agreement got the support of 1/3 -- almost 1/3 of your shareholders. And in May 2022, our resolution will come to vote again at your AGM then, obviously, in the U.K., in London, I suppose. Today, you have our support to move to a single-share structure in the U.K. In your announcement, you assert that a single-share structure "will strengthen Shell's ability to rise to the challenges posed by the energy transition." That's what we want Shell to do. And for us and I think for the world, the most -- the single most important challenge posed by the energy transition is to almost halve emissions, global emissions, in the next 8 years. Global greenhouse gas emissions have to be reduced by approximately 45% by 2030 to have any chance to reach the Paris Climate Agreement. And we support Shell to play a leading role on that. So according to the Paris court, the IPCC, the Glasgow pact, the Dutch ruling, The Dutch -- District Court of The Hague and almost 1/3 of your shareholders, absolute emissions have to go down by approximately 45% in 2030. So please be aware this is in the next 8 years. These decisions to achieve this, this enormous overhaul of the entire global energy system, has to be taken in the next couple of years, in your tenure, Mr. Mackenzie. In your tenure, you have to take very bold and brave decisions to drive the energy transition to achieve the Paris accord. And we follow this. And an increasing number of shareholders, therefore, need an answer to the following question. This question is, will Shell's current targets reduce your net absolute emissions by around 45% by 2030?

Okay. Well, great to meet you as well in person, Mr. Van Baal. And I'm certainly aware that some of the biggest challenges in energy transition will be faced within the next, as you put it, 8, 9, 10 years. And I -- and accepting the job of Chair of Shell and thinking about that is part of the reason why I wanted to do it, because I believe that we -- what Shell does in the next -- that period will define a lot of progress for -- not just for Shell but for the rest of the world. And I feel it's a real privilege to be given the opportunity to chair Shell at this very important time. And I think you've described it very well. So no issues there. I think you're well aware of our approach, that -- and I talked about continuously trying to do better than we think it could be possible today. Maybe we can do more tomorrow provided we can bring, importantly, other stakeholders along with us, governments and, most importantly, our customers. I hope you've noted that -- what I mentioned earlier, that we know -- I know it's perhaps not quite as quick as the way you're describing it. But relative to 2016, we expect to halve our Scope 1 and 2 emissions by 2030, and we continue to work extremely hard on our Scope 3 emissions. I think Shell has pioneered the approach of working sector by sector to show how we can change our offer to our customers so that they can continue to do their business but do it with emitting less and less carbon. And we have a wide range -- and I've been incredibly impressed by the amount of conversations that are happening sector by sector by sector on our Scope 3 emissions to bring that about. And I'm excited in 2 ways because, one, I do believe that is where the game will be won or lost, in your language. And we're absolutely on the park playing to win, and there's lots of great ideas. But the fascinating thing is -- for shareholders in Shell is -- that now it gives us, to actually play in many markets that we're not currently present and therefore open up new profit pools for our company in a way that really makes me extremely optimistic about Shell's future. So thank you for your question. I think we're, in many ways, aligned, maybe not in kind of precise numerical terms. But directionally, we most certainly are. And I thank you for your support of this change because you are right, the pace that we have to move, the way that we are going to have to, if you like, pull back from some businesses, getting much larger into new businesses, into new sectors, will require a lot of change. And we want to do that transparently with our shareholders and look after shareholder returns. And then -- and what's on the table today is a mechanism that will allow us to do that in the way that you would like but also in a way that protects our ability to offer a decent return to our shareholders and preserves our desire to exert a huge level of capital discipline. So thank you.

So again, the question was, will your total emissions be down by 45% in 2030? I take this answer as a no or I don't know. Luckily, there's an Australian research institute who went through your Powering Progress program through all your publications, and they projected your emissions in the next 10 years. Their conclusion -- and I advise you and all shareholders to read this report. It's published by Global Climate Insights. It's an Australian research institute. They concluded that your emissions in 2030, based on your current strategy, that these emissions will be -- not be down, no. They will be up by 4%. And that's an issue your shareholders have with you right now. So Mr. Mackenzie, somebody has to tell you the truth.

Yes, no. But let me -- look, I mean...

And your shareholders are losing their patience. Shareholders are losing their patience. You need to decrease your emissions. It's us who are...

Okay. I know we're talking about absolute versus relative emissions. And -- but I don't think you can take it as a no. I think we are trying very hard to substantially reduce the carbon content of the products that we offer whilst continuing to serve the markets and do -- provide all the services that Shell have provided for over 100 years. To the extent that we're able to do that, we will have shown the world what is possible in moving towards decarbonization. We may measure it differently. We may feel more strongly about the carbon intensity of our products than you do. But I don't think you can take it as a no. But I'm sure we'll have this debate again when we come to our AGM when we publish our update on Powering Progress. And I will make sure your concerns are properly addressed to the satisfaction of all shareholders. Thank you.

You're right. So I'm looking forward to see you in May...

Okay.

In London.

Thanks, Mark. We will now go back online again because we've got a couple of questions online which I'd like to read. We will do 2 questions online, then we will go onto the phone again because we still have Sylvia waiting. So the first question online is, from [ Maureen N. Brighton. ] "We have listened to several questions which major on the move to green energy, which we feel is not really relevant to the purpose of this meeting. We encourage Shell not to be deflected by such pressure for pressure is what this is. Please, can you be encouraged to consider special dividends or increased dividends instead of share buybacks? These are more value to the small private investor. Thank you."

Well, and thank you, [ Maureen ]. In sort of -- in principle, I agree with what you're saying, that this is -- there's quite a narrow purpose for this meeting about the collapse of the A/B line and the move of our tax residence to the U.K. or the changes to the Articles of Association that enables the Board to consider that as a possibility. And we will not be deflected by pressure to actually, in some way, harm the returns to our shareholders. That, of course, is important to us, as is capital discipline. However, we do believe that if we get the energy transition right, we will be able to do it in a way that is enhancing to shareholder returns as well as clearly doing the right thing and by the way of where some of that pressure is coming from. And so hopefully this will be, if you like, a marriage made in heaven, and that's very much our intention. But you're right, this meeting should focus on the simplification that will allow us to drive faster into the energy transition whilst looking after returns to shareholders. Now I'm well aware that the right way to return, and we should return in this environment, excess cash to shareholders is always a matter of some debate between different classes of shareholders. And then some prefer buybacks and some prefer their preferred dividends, and we always have to figure out what is right. At the moment, of course, we feel that our shares are relatively undervalued. And therefore, buying them back is a very sensible thing to do as we are able to return more money to shareholders. And you know that, that's our intention. We've already announced that. Now we've received the proceeds from the sale of our Shell business in the United States, that we will return them the vast bulk of those proceeds via a buyback we'll be -- in the coming months. Of course, if we agree with this proposal and we enact it, we can return them much quicker than would be the case if we're doing it through the -- with still the 2 lines of shares intact. We have, I think, moved quite quickly in recent past as we've restored the balance sheet to health to increase our dividend and to -- by, I think, nearly 40%, and we've also, I think, committed to a 4% annual increase in dividend per share. So in that way, I think we're doing our best to look after the small investor who thinks the way you do as well as some of the other considerations and value for money from buying back our shares. I don't know, Jessica, if you want to add to that. I said a bit more than I thought I would, but...

I think it's been well covered. What I'd say is that we, again, consider each of these options we have in terms of returning cash to shareholders and the different ways we can do that. Of course, in the second quarter, we did increase our dividends. We thought that was an important piece of our shareholder distribution story. And so we recognize dividends are important. That -- and that's why we made the change in Q2. That's why we have a progressive dividend. And looking forward, we will continue to consider what is the best way of returning cash for our shareholders and increasing total shareholder returns. And I expect dividends will continue to be an important piece of that.

Thank you. Thanks, Mr. Chair. Thanks, Jessica. I will go now to another question on the line. We have a question from a Dutch shareholder, [ Jules Fraumheeljen ], and he's a private investor. "If the resolution is adopted, will there still be a shareholder meeting in the Netherlands? If not, will there be a link to the big screen in the Circustheater or something else? We just want to keep close to this wonderful company. Thanks in advance."

Well, thanks, [ Jules ]. I mean -- and look, we have to take account of all these suggestions as we design -- if we go ahead with the -- if the vote is won and we go ahead with the things that we're talking about today because we do want to keep this wonderful company close to this wonderful country. And it's important to us. We do really believe that the future of Shell will be far better if we retain a strong Dutch or Netherlands heritage. And we fully intend to do so. And so we want to remain alongside you and you alongside us. And so I welcome these suggestions. And we'll certainly take them very seriously because we absolutely share your desire.

Thanks, Mr. Chair. Can we now go back onto the audio line? And then we'll come back to question #2. So first, the audio line because I know Sylvia is still waiting. Operator, back to you.

Sylvia van Waveren, your line is open.

Thank you, Mr. Chairman, for giving me a second chance to raise the third question that we have. And I would call it the Dutch heritage. Yes, as -- we also noticed there are new developments around the exit tax charge, and you already received earlier in this meeting a question about that. You say there's a lot of uncertainty around this tax charge, and we agree. It's difficult for us to make an estimation what the effect of the amendment is, and we can only speculate at this moment. But when we do that, a potential tax liability risk of EUR 1.15 billion might persist pending approval of the bill in Dutch Parliament and possible court proceedings. This amount is much lower than we previously estimated before the amendment. However, we understand from fiscal experts whom we spoke that the chance of materialization of the claim has increased by the amended bill. My question is, can you confirm to us that you will well balance this exit tax charge and all the developments around it in your final decision in the beginning of '22, when the Board will make a final decision of installing a more streamlined corporate structure of Shell? And before you answer this last question, I would like to take the opportunity to thank you, Chairman, and to wish [Foreign Language] for your CEO. Thank you very much.

Okay. Well, thank you, Sylvia. And yes, of -- we all, I think -- I'm sure everybody here would wish Ben [Foreign Language] as well and a fast recovery. But I think to your point, yes is the answer to your question. Today, we are voting simply on a change to the articles that will give the Board the chance to decide as to whether we move forward. Now clearly, under current circumstances and the way we're having this debate is that we feel, as a Board, pretty strongly that we're likely to move forward. But when that time comes, we absolutely will look at circumstances as they are when we come to make that decision. And we'll weigh all the things that you've mentioned very much in the balance before we actually take that decision. So you have my commitment to do that. That was -- it would always have been the case. I mean we, as a Board would like to be fully up to date when we make any decision. But right now, of course, the direction is clear. But today, we're only voting on giving us the power to make that decision sometime in the future. Thank you.

Okay. Now let's go back into the room, question point #2. I know someone is waiting there eagerly.

[Foreign Language] Is it a problem?

No, it's okay. And [Foreign Language]