Latest reports suggest that some of the UK’s largest investors have backtracked on their support for a shareholder resolution that would force the big oil companies to cut their carbon emissions.
Asset managers at Legal & General, abrdn and Janus Henderson are said to have voted against the climate resolutions put forward by Follow This, a Dutch shareholder activist group, at the annual general meetings of the US oil companies Chevron and ExxonMobil this year, having voted in favour of them in previous years.
Mark van Baal, who is the founder of Follow This, claimed that the investors had chosen to sacrifice climate action in favour of “short-term profits”, which have rocketed after Russia’s invasion of Ukraine last year.
Van Baal said: “This is a false dilemma: shareholders can enjoy dividends from oil and gas while oil majors invest these profits in renewables to drive down emissions at the same time. Taking short-term fossil fuel profits and addressing long-term climate risks are not mutually exclusive.”
Legal & General Investment Management (LGIM) said it rejected the claim that it had chosen short-term profits over its commitment to climate action.
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“To the end of May 2023, LGIM had supported 70% of shareholder resolutions on climate, and will be voting against almost 300 company directors for not meeting our climate expectations. We are supportive of the basic principles of the Follow This proposal, but still have concerns about the text of the 2023 proposals,”it said.
A spokesperson for LGIM did not clarify the company’s specific concerns when approached. However, Follow This has targeted all leading oil and gas companies with a shareholder resolution calling on their boards to cut their emissions in line with the scale of reductions required by the Paris climate agreement.
The 2015 accords call for all countries to limit their emissions in order to stop global temperatures rising by more than 1.5C above pre-industrialised levels by 2050. Many oil companies intend to increase the amount of oil and gas they produce until 2030.
Andrew Mason who is the head of active ownership at abrdn, said the investor had reservations about the implications of shareholder climate resolutions because they were raised separately from financial statements or annual report and accounts.
Story was adapted from the Guardian.
