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IPE special report May 2018

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Church of England to file shareholder resolutions at BP, Shell AGMs

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The Church Commissioners and Church of England Pensions Board are to co-file shareholder resolutions on climate change at the annual general meetings of BP and Shell next year.

The two bodies, which together own £7.7bn (€9.8bn) worth of assets, are members of the Church Investors Group (CIG), made up of institutional investors from mainstream Christian denominations and church-related charities, predominantly in the UK and Ireland.

As a whole, the group’s investments total £15bn.

The Central Finance Board of the Methodist Church is also co-filing the resolutions, as are some other CIG members.

Edward Mason, the Church Commissioners’ head of responsible investment, said in a Church of England blog post: “It is clear from the latest assessment report of the Intergovernmental Panel on Climate Change (IPCC), released this year, that the world is on a path towards dangerous climate change.  

“It is imperative that, over the decades ahead, we make the transition to a low-carbon economy.” 

The CIG’s largest members have helped establish an investor initiative to engage on climate change with the 10 largest extractives and utilities companies listed on the London Stock Exchange (LSE).

The coalition also includes the Local Authority Pension Fund Forum and Rathbone Greenbank, the ethical fund manager, and is led by CCLA Investment Management, the specialist church and charity fund managers. 

Every year, the performance of global companies on climate change is rated by CDP (formerly the Carbon Disclosure Project), an NGO that collects and analyses data for this area.

It is the investors’ initiative – called ‘Aiming for A’, after CDP’s highest rating (A) – which has prepared the shareholder resolution.

Mason said: “We have chosen to file shareholder resolutions at BP and Shell because they have the biggest carbon footprints of all the companies listed on the LSE, and they are yet to achieve A ratings (they are both rated B).”

He added: “The resolutions are supportive but stretching. We want the companies to be sustainably profitable.

“The idea is to give all the shareholders of both companies the opportunity to signal that, like us, they want to see BP and Shell adapt their businesses over the long term for a low-carbon economy.” 

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 energy outlook, sustainability review and annual report.

A BP spokesman said: “We have had constructive discussions with CCLA and are aware they intend to file a resolution for our AGM in April 2015.

“We will carefully consider it and respond appropriately before the meeting.”

The shareholder resolution for Shell’s AGM will be very similar.

The group’s UK AGM takes place in May 2015, shortly after its Netherlands AGM.

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