CITYA.M.
God vs Big Oil: Church of England loses faith in Shell’s climate plans ahead of AGM
NICHOLAS EARL
The Church of England (CofE) will vote to oust Shell’s chief executive Wael Sawan and chairman Sir Andrew Macenzie at the upcoming shareholder meeting of the energy giant later this month.
The clergy’s pension board – which manages the CofE’s £3bn retirement pot – has lost trust in the energy giant following a row over green investments.
Shell has been accused across the industry of backtracking on net zero commitments and the CofE is particularly concerned that the London-listed company has rowed back on promises to switch to clean power after the Ukraine war sent oil and gas prices soaring.
Adam Matthews, chief responsible investment officer for the Church of England Pension Board, told The Telegraph it was “with genuine regret” that he was preparing to vote against Sawan and Sir Andrew but claimed closed door talks on climate issues had ground to a halt.
Matthews said: “We have lost confidence in the direction of the company.”
The Church’s retirement fund has accused Sawan of downplaying the importance of renewables and prioritising short-term profits since he took over as chief executive in January with the energy boss open to raising oil and gas production.
Shell reported an annual profit of £32.2bn earlier this year the biggest in its 116-year history.
The Church accused the company of refusing to use the cash windfalls to ramp up investment in renewables and instead handing £9.5bn to shareholders.
Matthew said this approach “may provide short-term dividends” but risked making the global switch to green energy “less likely and more unstable”.
City A.M. has approached Shell for comment.
The energy giant has previously argued that it is ramping up production of climate-friendly energy sources faster than the world is adopting them.
Shell has set a target of reducing its own emissions 50 per cent by 2030, and recently announced that it was already over halfway towards meeting that goal.
The votes against Sawan and Sir Andrew are chiefly symbolic given the CofE’s minor stake in the company – which is worth around £1.2m.
However, the activism could prompt other investors to put pressure on the company.
Could the CofE’s stance lead to others changing their mind?
The church is part of the Climate Action 100+ group, which pressures companies responsible for the most greenhouse gas emissions – including oil companies such as BP and Shell – to gradually switch to renewables.
Other members include Blackrock, Legal and General and Aviva.
The expected tussle at the AGM in two weeks followed BP grappling with a backlash for scaling back its climate commitments.
However, it ultimately won over investors – defeating a push from British pension groups to oust its chairman Helge Lund and voting down Follow This’ proposals for more stringent scope threec rules.
The church pension board plans to vote against Shell’s proposed green energy strategy and will instead back Follow This’ alternative proposals.
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