Over £20bn in UK pension money invested in Shell despite ongoing expansion of oil and gas

15 May 2023

Over £20bn in UK pension money is invested in Shell according to new research from Make My Money Matter, a campaign founded by filmmaker and activist Richard Curtis. The analysis estimates that the average UK pension invests £905 in the oil and gas major, contradicting the shifting expectations of savers who do not want their money to fund companies driving fossil fuel expansion.

The findings follow Shell’s recent Q1 results which saw the fossil fuel giant report record profits of $9.6bn. Despite its pledges to reduce emissions, Shell continues to explore and develop new oil and gas, which will prevent us from limiting climate change to a liveable 1.5 degrees. Its lack of 2030 Scope Three absolute targets is also a major concern given the importance of urgent action this decade, indicating to investors Shell’s climate plans are insufficient.

Several UK pension schemes are announcing plans to vote against Shell’s Directors for failing to sufficiently act on climate and putting members savings at risk. Nest, the UK’s largest pension scheme by members (12 million) with £29 billion assets under management, will vote against the re-election of Shell’s Chair and its ‘Energy Transition’ resolution. It will also support a shareholder resolution filed by FollowThis calling on Shell to align its carbon reduction targets with the Paris Climate Agreement.

London CIV – a major UK pension pool with combined assets under management of £48.9bn – is also leading the industry by voting against the company’s Chair and directors later this month. This position is supported by PIRC – an influential investment adviser – who this week recommended that investors vote against the re-election of Shell’s chair Sir Andrew MacKenzie in efforts to hold board members accountable for inaction on climate.

This is not the first time Shell’s board has been targeted as, earlier this year, environmental law charity ClientEarth filed a climate risk lawsuit against them for failing to adopt and implement an energy transition strategy that aligns with the Paris Agreement.

In using their shareholder power to influence change, pension schemes are not only fulfilling their promises on climate and protecting member savings but responding to the expectations of their members too. Polling from Make My Money Matter has shown that while 58% of savers have no idea that their money is invested in Shell, over eight million UK pension holders do not want their savings to fund fossil fuel expansion. In fact, almost ten million think their pension fund should vote against Directors at Shell for their failure to act sufficiently on climate change, while almost five million would switch pension provider if they discovered that their savings were invested in Shell.

This AGM season, Make My Money Matter is calling on the UK pensions industry to follow in the footsteps of Nest and London CIV to vote against directors at Shell. The campaign group is also calling on pension schemes to vote against the company’s Energy Transition Progress resolution, and to support the “Follow This” climate resolution. In doing so, they will be listening to their members, and the science, by taking a clear position that no UK pension investment should be used to fund fossil fuel expansion.

Shell’s Annual General Meeting will take place on Tuesday 23rd May. Its deadline for votes closes on Friday 19th May.

Commenting on the research, Tony Burdon, CEO at Make My Money Matter said: “Shell keeps expanding oil and gas, despite our planet screaming for it to stop. But our pensions give us power to change this. With approximately £20billion invested in Shell, the UK pensions industry can play a huge role in pushing Shell to reduce emissions and rule out financing for fossil fuel expansion.

“The pensions industry is adamant that only through engagement can they really make a change in how fossil fuel companies act. Well, now is the moment for it to put its money where its mouth is. That’s why Make My Money Matter is calling on the industry to finally flex its muscles in boardrooms this AGM season and vote to make Shell and its polluting peers do better, to protect members savings and our planet. Because you can’t claim to be a leader on climate but continue to support the directors of companies who are driving fossil fuel expansion.”

Katharina Lindmeier, Nest’s Senior Responsible Investment Manager commented: This AGM season we’ve seen key oil and gas companies in our portfolio failing to properly manage climate risks. “Shell is pursuing further oil and gas extraction, despite the company being highly exposed to the physical impact of climate change and at risk from carbon taxes and stranded assets.

“Following their record profits, we’d hoped Shell would step up their activities towards meeting their net zero ambitions. Instead, they’re kicking the can down the road and increasing the risks on long-term shareholders.”

Jacqueline Amy Jackson, Head of Responsible Investment at London CIV said: “The unequivocal social and financial impacts of climate change, imposed on future generations will no doubt be compounded by underinvestment in renewables, an absence of meaningful targets and overinvestment in fossil fuels. Long term investors should not be dazzled by short term profits today, when the amount reinvested into the solutions of tomorrow is so derisory.

“With an ambitious net zero target of 2040, London CIV will do whatever it can, not only to preserve our clients’ long-term investments and the pensions of beneficiaries, but to protect the planet so that they can spend their wealth in a world that’s safe and inhabitable.”

Source: London CIV
Multiple reports with cicle diagram and text

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