Executives at some of the UK’s largest banks are set to face increasing investor scrutiny over climate issues at upcoming AGMs, with the Church of England (CoE) Pensions Board joining the ranks of investors to oppose their reappointment.
The CoE Pensions Board, which manages around £3.4bn on behalf of clergy and church workers, said it will vote against the reappointment of directors at HSBC, NatWest and Santander as the banks have backtracked on climate commitments.
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The decision draws on research from ShareAction, which has identified lenders that have weakened climate targets, diluted financing restrictions for high-risk sectors, or stepped back from previously stated commitments.
The Board said it will also conduct bank-specific risk assessments using the TPI Banking Tool to identify responsible directors and evaluate the financial risks associated with such changes.
Laura Hillis, managing director for Responsible Investment at the Church of England Pensions Board, said: “Good governance is the first line of defence against systemic risk. When banks dilute or abandon commitments that investors have understood to be part of their strategy and risk management approach, it raises serious questions about board oversight, risk management, and long-term strategic resilience.”
She added: “We recognise that circumstances can materially change in some cases. This is not about punishing companies that have failed to meet commitments despite best efforts. It is about the integrity of governance. Investors need confidence that directors will maintain consistent, credible oversight of climate and risk policies. Where that confidence is undermined, we will act.”
The move comes amid a broader shift among institutional investors to tighten scrutiny of banks’ climate strategies. Danish pension fund AkademikerPension and UK-based Nest have also signalled their intention to oppose the reappointment of directors at firms seen to be weakening their climate ambitions.
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