God v Shell v Astronaut Ron Garan

News that 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. It comes as 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. But it’s not the first time the CofE has expressed concern about Shell’s ‘green’ credentials.

Almost 2 years ago to the day, the CofE issued another damning statement against the Oil giant alongside it’s partners Robeco with whom they had a co engagement with Royal Dutch Shell about its transition to being net zero on behalf of Climate Action 100+. Climate Action 100+ is in the third year of a five-year engagement that concludes in 2023 so it’s such a bold move to oust the current CEO is perhaps unsurprising.

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 and Shell has been accused across the industry of backtracking on net zero commitments while the company reported a record annual profit of $40bn for 2022 after posting better than expected profits in the final quarter of last year. The full-year profits were more than double what it reported in 2021 owing to rocketing oil and gas market prices last year, leading to calls for a windfall tax on the earnings.

Shell’s CEO Sawan, said the company had delivered “strong results and robust operational performance, against a backdrop of ongoing volatility”.

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. Charlie Kronick, of Greenpeace UK, said: “As temperatures soar from Madrid to Mogadishu, Shell is once again posting bumper profits while promising to keep extracting fossil fuels for years to come. Millions around the world are already feeling the effects of the climate crisis and it’s those who did the least to cause it who are paying the heaviest price.

“The UK government should stop issuing new oil and gas licences and force Shell and the rest of the industry to start using their obscene profits to pay for the damage that their fossil fuel habit is causing to lives and livelihoods around the world.”

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”.

When approached for comment, a Shell spokesperson said: “Shell and the CofE pensions board have worked together as partners on the energy transition for almost a decade, with an emphasis on changing the use of energy as much as its supply. We continue to believe that is the right approach and strongly disagree with the pension board’s changed position.

“Our strategy remains unchanged – to become a net zero energy company by 2050 or sooner. And in the last year we’ve made very good progress in reducing emissions and investing in low carbon energy.

“We trust a vast majority of shareholders will agree on the need to collaborate in balancing the supply and use of energy to accelerate the energy transition and minimize the social costs.”

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.

Clearly, oil companies seem to believe that planet earth is just going to get lightly singed and not incinerated by rising temperatures which is not the view shared by Astronaut Ron Garan at last years Americas conference. And he really DOES have a truly global view of what’s going on with with climate change!

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.

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.