Top UK Pension Funds Intend To Vote Against BP And Shell Directors

By Tsvetana Paraskova - Mar 13, 2023

Following announcements from BP and Shell that they intend to continue supplying the oil and gas the world needs, some of the largest UK pension funds are threatening to vote against individual directors at the annual general meetings because of the companies’ reduced emissions targets.

Universities Superannuation Scheme (USS) and Borders to Coast, which have a combined $157 billion (£130 billion) in assets under management, intend to vote against individual directors at Shell and BP at this spring’s annual general meetings of the two UK-based supermajors, representatives of the pension funds told the Financial Times.

BP and Shell have recently signaled they would be producing more oil and gas for longer than planned when they announced their net-zero strategies in early 2020.

Last month, BP said it would be producing more oil and gas for longer, and now aims for a fall of 20% to 30% in emissions from the carbon in its oil and gas production in 2030 compared to a 2019 baseline, lower than the previous aim of 35-40%. 

Earlier this month, Shell’s new CEO Wael Sawan told The Times that the supermajor’s plan to have its oil production decline by up to 2% each year this decade is currently under review.

The pension funds in the UK do not seem happy with climate targets taking a back seat at the oil supermajors.

On Sunday, USS said that “Our new Stewardship and Voting Policy will see us vote more personally against responsible directors where possible,” announcing it would vote against individual directors on climate transition plans.

“This approach is a change from voting more generally against a company’s Annual Report and Accounts and allows us to hold individual directors accountable – research suggests taking a more personal approach to voting is more likely to drive change, which is why it’s now at the forefront of our voting policy,” USS said.

After BP’s pivot on emissions targets last month, Border to Coast said that “Oil majors and banks must make greater progress on climate pledges or risk losing the support of Border to Coast Pensions Partnership on key votes this AGM season.”

By Tsvetana Paraskova for Oilprice.com