Border to Coast continues engagement with Shell after ‘disappointing’ climate targets
Border to Coast, the pooling vehicle for 11 Local Government Pension Scheme (LGPS) funds, has reported that its stewardship with supermajor Shell is “ongoing” despite reporting “disappointment” over “inadequate” climate targets
In its latest quarterly stewardship report, Border to Coast reported that in April 2024 it attended a small group meeting with Shell’s chair of the board, Andrew Mackenzie, ahead of its annual general meeting (AGM) in May.
During the meeting, the UK LGPS pool welcomed the company’s new medium term absolute emissions reduction target for Shell’s oil production but expressed “disappointment” that a similar target did not cover gas.
Border to Coast also discussed the stranded asset risk associated with Shell’s plans to expand its Liquefied Natural Gas (LNG) business.
Following the meeting, Border to Coast escalated engagement with the oil and gas supermajor, pre-declaring that it would vote against the re-election of the chair due to “inadequate targets and decarbonisation strategy”, the stewardship report revealed.
Alongside this, the pool announced its voting intention for Follow This’ climate resolution at the Shell AGM, urging the energy company to set tighter climate targets.
Despite this, Border to Coast confirmed in its stewardship report that its engagement with Shell is “ongoing”.
Engagement focus on banks
The quarterly stewardship report also highlighted Border to Coast’s increased focus on engagement with banks.
Border to Coast reported that it has partnered with Royal London Asset Management (RLAM) to engage with Barclays, Lloyds, NatWest and HSBC on the integration of the just transition into their net zero strategies.
According to the LGPS pool, to date, two of the banks have committed to taking the requested action, one of them has included just transition ambitions in its net zero plan, and one has stated support for just transition principles.
Alongside this, Border to Coast attended the NatWest AGM in April to ask chair Rick Haythornthwaite to consider a formal just transition plan or integration into its existing net zero plans, the report revealed.
This comes as the 2024 AGM season has seen a shift in investor focus from oil firms to banks.
For example, UK banks, including HSBC and Barclays, faced increasing investor pressure over climate issues, with Barclays’ AGM disrupted by climate protests.
Whilst in the US, global pension funds backed shareholder proposals, filed by the Comptroller of the City of New York, at the AGMs of Bank of America, Goldman Sachs and Morgan Stanley calling for them to disclose their annual clean energy financing ratio.
