More than 50 institutional investors with portfolios totalling £160bn (€209bn) have co-filed “supportive but stretching” shareholder resolutions for the annual general meetings of BP and Shell, asking for further reporting on a number of areas affected by climate change, including low-carbon research and development, and emissions management.
The investors include the UK Local Authority Pension Fund Forum (LAPFF); church investors, such as the Church Commissioners for England and the Central Finance Board of the Methodist Church; and other European pension funds, including Ilmarinen and Swedish buffer funds AP2, AP3 and AP4.
Eight of the co-filers each have assets of more than $15bn (€13bn).
The “Aiming for A” coalition is led by CCLA Investment Management, the specialist church and charity fund manager.
Its purpose is to engage on climate change with the 10 largest extractives and utilities companies listed on the London Stock Exchange (LSE).
Its name is taken from the highest rating (A) of CDP (formerly the Carbon Disclosure Project), an NGO that rates the performance of global companies on climate change.
The special resolution – ‘Strategic resilience for 2035 and beyond’ – and amplified by a supporting statement, calls for routine annual reporting from 2016 to include further information about ongoing operational emissions management; asset portfolio resilience to the International Energy Agency’s scenarios; low-carbon energy research and development and investment strategies; relevant strategic key performance indicators and executive incentives; and public policy positions relating to climate change.
The resolution says this additional ongoing annual reporting could build on the disclosures already made to CDP and/or those already made within the company’s sustainability review and annual report.
Dawn Turner, head of pension fund management at Environment Agency Pension Fund, said: “Transparency forms the core of our strategy to reduce climate risk, and it was an easy decision for EAPF to co-file.
“By asking BP and Shell to report effectively on climate-related risk in their routine annual reporting, this will provide all shareholders with the information to assess how these companies are managing risk and protecting shareholder value.”
Stephanie Maier, head of responsible investment strategy and research at Aviva Investors, said: “The economic and financial case for future policy changes addressing climate change is clear.
“This will necessarily impact the profitability of more carbon-intensive energy assets over time. We are, therefore, in favour of lower carbon intensity capex plans in the energy sector.”
She added: “These shareholder resolutions are in line with this aim, focusing on strategic resilience and asking key questions. We will be speaking with BP and Shell before deciding how to vote, and look forward to that discussion.”
BP’s AGM is on 16 April and Shell’s in May.
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