Erik Jan Stork, Senior Sustainability Specialist at APG, said: “APG welcomes BP's support of this resolution. Structural changes in the energy markets, resulting from policy decisions and technological breakthrough, can alter the long-term outlook for energy companies. We expect BP and other energy companies to take account of these changes in developing their long-term business strategies. For example by taking IEA’s 450 scenario into account, and by explaining to shareholders how uncertainties are reflected in their investment decisions, capital allocation and governance.”
Hermes Equity Ownership Services, which advises several major pension funds in the UK and overseas, is also recommending a ‘for’ vote for resolution 25 at the BP AGM.
Responsible Investment charity ShareAction and environmental law group ClientEarth have welcomed the announcements of the latest set of institutional investors to declare their support for the resolution on climate change put forward by the ‘Aiming for A’ coalition.
Waltham Forest and Cheshire were the latest local authority pension funds to announce their support, following announcements by 25 other UK members of the Local Authority Pension Fund Forum (LAPFF), which is part of the ‘Aiming for A’ investor coalition.
ShareAction’s Chief Executive Catherine Howarth said: “This latest wave of institutions publicly declaring their intention to vote yes to these resolutions showcases the broad swathe of support they have attracted among institutional investors. The resolutions have also received widespread support from the public, many of whom have used ShareAction’s online tool to email their pension funds urging them to vote in favour. It is encouraging to see pension funds taking leadership by taking their beneficiaries’ views into account on the critical issue of climate change.”
AEGON pension holder Partick Olszowski said: “Emailing my pension provider felt very strange. Until recently they had been nothing more than a deduction on my payslip. But when I got an email back from them today, saying they’re backing the shareholder resolutions about climate risk, I felt delighted to see that my pension savings are part of a powerful movement to change the world through the investment chain.”
Elspeth Owens, barrister at environmental law group Client Earth which helped to co-ordinate the filing of the resolutions, said: “It’s extremely encouraging that some of the largest asset owners and fund managers in the world are coming forward and declaring their voting intentions now. Pension funds are taking steps to protect their beneficiaries from climate change risk and this bodes well for the future of climate stewardship.”
Bill Seddon, CEO Central Finance Board of the Methodist Church and Chairman of the £15bn Church Investors Group added: "We're aware that some large UK investors in BP haven't been able to declare their votes in favour of resolution 25 yet. An early Easter has made it difficult for exceptions to non-disclosure policies to be signed-off. Church investors are, however, delighted to hear that they will be joined by major insurance companies, pension funds and fund managers at BP's AGM next week."
The largest members of the Church Investors Group are part of the ‘Aiming for A’ investor coalition convened by charity investment specialist CCLA. Sarasin & Partners LLP has recently joined the coalition alongside fellow wealth manager Rathbone Greenbank.
Dr Claire Molinari, ESG Research Analyst at Sarasin & Partners LLP said: “People are increasingly astute about their power as owners to encourage positive change at companies like BP and Shell. Climate change is becoming a pressing concern for many pension fund and charity clients, who are fielding requests from their own beneficiaries to encourage companies to improve their strategies relating to fossil fuels. Shell and BP recognise that climate change poses risks to their physical assets, and that they face further challenges in adapting to increasingly robust regulatory action on climate change. We believe that individual pension fund beneficiaries would like to see leadership from companies like BP and Shell, not only in capital discipline, but also in supporting a meaningful carbon price at the international negotiations on climate change in Paris this year. Ultimately, this sector has an opportunity to transform the way we consume energy. This would be hugely beneficial for society and shareholders. Leaders in this field should offer shareholders a vision of a sustainable and prosperous future.”
Last week Aviva Investors, Jupiter Fund Management, Schroders and the Universities Superannuation Scheme announced their intention to back the resolution. Leading pension funds Local Government Super (Australia), CalPERS, Connecticut Retirement and Vermont Pension Investment (USA) are amongst asset owners who have already declared their support. Finnish fund Ilmarninen and the Swedish national AP2-AP4 conglomerate are also backing a yes vote, alongside the UK’s Environment Agency Pension Fund.
The BP board publicly indicated its intention to advise shareholders to support the resolution in early February. A similar resolution originated by ‘Aiming for A’ has also been lodged with Royal Dutch Shell for a vote at their forthcoming AGM. Shell has similarly announced its support of the resolution. Ongoing declarations of support by shareholders are likely in the approach to Shell’s AGM in the Hague on 19th May.
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