A major problem for obtaining target reflectance via hyperspectral imaging systems is the presence of illumination and shadow effects. These factors are common artefacts, especially when dealing with a hyperspectral imaging system that has sensors in the visible to near infrared region. This region is known to have highly scattered and diffuse radiance that can modify the energy recorded by the imaging system. A shadow effect will lower the target reflectance values due to the small radiant energy impinging on the target surface. Combined with illumination artefacts, such as diffuse scattering from the surrounding targets, background or environment, the shape of the shadowed target reflectance will be altered. We propose a new method to compensate for illumination and shadow effects on hyperspectral imageries by using a polarization technique. This technique, called spectro-polarimetry, estimates the direct and diffuse irradiance based on two images taken with and without a polarizer. The method is then evaluated using a spectral similarity measure, angle and distance metric. The results of indoor and outdoor tests have shown that using the spectro-polarimetry technique can improve the spectral constancy between shadow and full illumination spectra.