British pension funds threaten to vote against Shell managers

Two major British pension funds are threatening to vote against appointing directors at oil and gas groups Shell and BP if they do not tighten their climate targets. This is what the directors of the USS Pension Fund and Borders to Coast Local Authority Pension Fund said in the British business newspaper The Financial Times. The two funds jointly manage 130 billion pounds, equivalent to about 147 billion euros, in pension assets.

By voting against appointing and reappointing directors, the two pension funds want to force oil and gas companies to bring their activities in line with Paris climate goals more quickly. They believe the “personal approach” can be better understood by officials and call this dissenting voice “one of the most compelling ways investors should influence policy.”

No carbon dioxide emissions

Both Shell and BP have set themselves a goal of net zero carbon dioxide emissions by 2050. But they rely heavily on technologies that still need to be developed, such as carbon dioxide capture and storage. So companies are criticized for not greening fast enough, and shareholder activists like Follow This and more pension funds have been trying for years to accelerate greening through shareholder decisions.

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But after the two companies recently announced record profits for 2022, BP said it would phase out gas and oil extraction through 2030 at a slower pace than previously planned. Shell’s new CEO, Wael Sawan, said his company may continue pumping more oil for a longer period.

Reset

Therefore, both pension funds are ready to vote against the reappointment of supervisory directors Andrew McKenzie from Shell and Helge Lund from BP. The USS University Pensions Fund, one of the UK’s largest pension funds with £91 billion in assets under management, wants to vote against whether companies do not provide a specific distribution for investments in projects that increase carbon emissions.