A Shell logo seen at a petrol station in London. A court in The Hague has ordered oil giant Shell to reduce its carbon emissions by 45% compared to 2019 levels by 2030, in what is widely seen as a landmark case.
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LONDON — Shareholders of oil giant Royal Dutch Shell on Friday voted to approve plans for the company to overhaul its legal and tax structure and move its headquarters to the U.K. from the Netherlands.

The Anglo-Dutch company has said the simplification of its dual tax structure is designed to strengthen its competitiveness, accelerate its energy transition plans and help to make distributing profits to shareholders more straightforward.

Preliminary results on Friday morning showed 99% of shareholders voting by proxy had backed the special resolution, Reuters reported, with 58% of outstanding shares cast.

An official tally is expected later, although it is seen as unlikely to change the outcome. The motion requires the approval of at least 75% of the votes cast to pass.

The proposal will see the company drop the “Royal Dutch” from its name to become “Shell PLC.” A move to London from The Hague is expected sometime early next year.

Critics of the move argue Shell’s proposed relocation is partly motivated by a landmark courtroom defeat earlier this year, a decision the company is appealing. A Dutch court ruled in May that Shell must reduce its global carbon emissions by 45% by the end of 2030, compared with 2019 levels.

The verdict marked the first time in history that a company had been legally obliged to align its policies with the Paris Agreement and reflected a watershed moment in the climate battle.

Shell has said its environmental policy would not be affected by the move.

The Dutch government said last month that it had been “unpleasantly surprised” by Shell’s proposal to move its headquarters to the U.K.

A ‘corporate tidying up exercise’

Shell’s simplification strategy seeks to establish a single line of shares to scrap the firm’s unusual and complex dual-class share system. The company has been incorporated in the U.K. and had a Dutch tax residence since 2005.

A new single share tax structure and British tax home would mean it no longer has to abide by a 15% withholding tax charged on dividends.

Nick Stansbury, head of climate solutions at Legal and General Investment Management, a top 20 shareholder of Shell, said on Friday that the vote to approve Shell’s plans had no major downsides for investors.

“These changes, they sound like they are enormously important, that they should be very, very controversial, that they going to have really big far-reaching consequences for the company, but we don’t really think that that’s the case,” Stansbury told CNBC’s “Street Signs Europe.”

“We think this is actually a relatively routine bit of corporate simplification, a kind of corporate tidying up exercise to deal with a complex bit of historical legacy that is simply no longer needed in the world that Shell now lives and operates in.”

Stansbury said the oil giant would be able to return capital to shareholders more efficiently if the resolution was approved.

Shares of Shell were 0.6% higher at around midday in London. The oil and gas company has seen its stock price climb roughly 33% year-to-date, having collapsed almost 45% in 2020.

A rebound in profits for oil and gas companies this year has prompted executives to reassure investors that they have gained a much more stable footing following a brutal year by virtually every measure in 2020.

Analysts have warned, however, that while energy companies try to claim a clean bill of health, investors are likely to harbor a “tremendous degree” of skepticism about the business models of fossil fuel companies in the long term.