MN and PGGM take over engagement with Shell under CA100+

Dutch investor duo takes over from CofE, USS and Robeco as chief engagers as part of investor engagement body.

Dutch investors MN and PGGM are the new lead engagers at European oil major Shell on behalf of the Climate Action 100+ investor engagement initiative. A spokesperson from each fund confirmed the new role to Responsible Investor.  

RI reported last week that the current CA100+ investor engagement group focused on Shell, including the Church of England Pension Board (CEPB), Robeco and the Universities Superannuation Scheme (USS), were stepping away from their positions as leads.  

CEPB has been publicly supportive of Shell’s climate efforts to date. Last year, the fund’s chief responsible investment officer, Adam Matthews, outlined in an op-ed in RI why it was backing the oil giant’s ‘Say on Climate’ plan. CEPB also announced ahead of Shell’s 2021 annual general meeting that it would not be supporting the shareholder proposal filed by climate activist group Follow This for the second year in a row. The proposal called for Paris-aligned reduction targets covering all of Shell’s emissions (Scope 1, 2 and 3).    

By contrast, PGGM, which manages €273 billion in assets, voted against Shell’s 2021 climate plan and supported the Follow This proposal last May. 

Shell’s 2022 AGM takes place on Tuesday 24 May, when shareholders will once again have an opportunity to vote on the Paris-aligned emissions targets proposal from Follow This. The board of the oil major is recommending a vote against the proposal, describing it as “unrealistic”. 

Both MN and PGGM are members of a €1.5 trillion Dutch investor alliance, launched in April, which is calling on oil and gas companies to disclose their future assumptions of oil and gas demand, prices, carbon tax and other climate-relevant metrics, in addition to adopting net zero plans.   

The seven-member alliance – which also includes NN Investment Partners, Achmea and Aegon – has urged other investors to leverage proxy voting to aid the green transition by only backing Paris-aligned company transition plans, supporting other resolutions that encourage progress on the green transition, and considering escalating actions for laggard companies by voting against director re-elections and remuneration packages that do not consider climate targets. 

“We want to underscore our unequivocal commitment to the Paris Agreement and limiting global warming to 1.5C and expect all companies and investors worldwide to do the same,” they wrote.  

Last Tuesday, PGGM posted a blog revealing that it would, on behalf of its pension fund client PFZW, be supporting proposals by Follow This at seven oil and gas firms this spring.  

“The security of our energy supply may now be attracting a lot of attention, but the climate problem remains – and its urgency is increasing by the day,” PGGM’s head of responsible investment, Piet Klop, and senior adviser responsible investment, Andres van der Linden, wrote. 

Follow This, in a letter seen by RI, has told MN and PGGM that it is “encouraged” by their appointment as lead engagers on Shell.  

The nonprofit’s founder, Mark van Baal, called on both to publicly declare their support for its proposal, writing: “It would be extremely impactful, and maybe even crucial, if all members of CA100+ are aware that one of the lead investors in Shell will vote in favour of resolution 21.” 

On Thursday, 15 percent of investors supported the Follow This proposal at UK-based oil major BP – a fall of six percentage points from last year.  

PGGM voted in favour of the Follow This proposal at BP and against the firm’s climate plan, stating that without absolute emissions targets it “cannot be certain of Paris alignment”.