UK local authority pension funds are among a coalition that has filed shareholder resolutions at Shell and BP, seeking clarity on how the oil majors plan to protect and grow shareholder value if oil and gas demand falls.
The resolutions, filed by activist shareholder group Follow This, together with West Yorkshire Pension Fund, Falkirk Council Pension Fund and Lothian Pension Fund, alongside 23 other institutional investors, have asked each company to publish a report setting out its strategy under declining demand scenarios.
These include the International Energy Agency’s (IEA) Stated Policies Scenario (STEPS) and Announced Pledges Scenario (APS). Some investors have chosen to co-file only one of the two resolutions, said Follow This.
Financial resilience
Follow This has requested that the reports include, at a minimum: capital expenditure on greenfield and brownfield projects across oil, gas and other energy sources; production and sales figures for those energy sources; and free cash flow projections.
Rather than pushing for tougher emissions targets, the resolutions focus on financial resilience, testing whether boards have a credible plan for value creation in a world where demand declines in line with widely used IEA outlooks.
In particular, they seek clarity on whether the companies intend to transition their business models, adjust investment plans, or manage an orderly wind-down of parts of their fossil-fuel portfolios, instead of continuing strategies predicated on sustained growth in oil and gas.
The 23 co-filing investors, which collectively manage about €1.5trn in assets, also include Achmea Investment Management, Edmond de Rothschild Asset Management, Ethos Foundation, Bernische Pensionskasse (BPK), Groupama Asset Management, La Financière de l’Echiquier, Ofi Invest Asset Management, Ostrum Asset Mangement, Pensionskasse Stadt Zürich and Publica.
Additionally, for the first time, the Shell resolution is being co-filed by a group of current and former Shell employees.
“We expect the companies in which we invest to be transparent about the strategic levers their management can utilise to create resilience and generate shareholder value”
Gillian de Candole, head of responsible investment at Lothian Pension Fund
Gillian de Candole, head of responsible investment at Lothian Pension Fund, said: “As an active owner, we expect the companies in which we invest to be transparent about the strategic levers their management can utilise to create resilience and generate shareholder value under a range of plausible scenarios.
“We acknowledge complexity in the shifting regulatory environment and the macroeconomic impacts of climate change. This is particularly relevant for companies in the energy sector, where the energy transition requires both capital and time for progress to be achieved.”
Inconvenient truth
Previous Follow This resolutions centred on emissions reductions. As shareholder support increased, several oil and gas companies, including Shell and BP, set CO2 reduction targets and invested in clean energy. In recent years, however, support has stagnated, partly due to concerns about legal risk, particularly in the US.
Speaking to IPE, Mark van Baal, founder of Follow This, said: “The goal is twofold. First, to create the conditions for clean energy to succeed regardless of the [current political] climate. Second, to put a new inconvenient truth on the ballot, that whatever happens, these companies will struggle to remain profitable as oil and gas demand declines. In a shrinking market, there’s no room for expensive oil, only cheap oil.”
In 2025, asset owners challenged Shell’s LNG expansion case and pushed for clearer disclosures. Separately, nearly a quarter of shareholders voted against the BP chair that year, while the UK’s Local Authority Pension Fund Forum pressed the company to demonstrate “genuine” capital spending discipline.
Shell and BP’s annual general meetings, where the Follow This resolution will be brought to a vote, are forecasted to be held later this year.
