Written by Kate Granville Smith,  Shannon Wright-Davies and Katy Dixon

On 16 January, the Pension Protection Fund (PPF) published a resolution that they had co-filed requesting Shell amend their medium-term emissions reduction targets so that they align with the Paris Climate Agreement. This is the first time the PPF have filed a shareholder resolution. 

The resolution was co-filed alongside 27 other major investors, who manage assets with a combined worth of €3.9trn (£3.3trn) and own approximately 5% of Shell's stock. The filing was also in collaboration with the activist shareholder group Follow This. 

The filing of this resolution continues the recent trend of both pension schemes and regulators increasing their focus on ESG, such as the Pensions Management Institute publishing a guide in collaboration with the Zoological Society of London explaining the impact of biodiversity on pension schemes. This action also comes just months after the Pensions Regulator issued its first climate change reporting fine against a pension scheme trustee, which is a significant development in regulatory action relating to climate change.


There appears to have been a change in Shell's climate change ambitions following a change in management, including a new CEO (Wael Sawan) in January 2023. Concerns over these changes in attitude appear to have been the catalyst which prompted action by the investors and PPF.

In a statement to Pensions Expert, Claire Curtin, the head of environmental, social and corporate governance and sustainability at PPF, stated that the PPF took this step because multiple oil and gas companies have been moving away from their previous climate change commitments. Instead, they are increasing focus on oil and gas production. 

Curtin stated that “We feel we should be sending a signal to company management that investors want more transparency on targets. […] We have been looking at our own portfolio and prioritising the key companies that are impacting our own footprint, so we have created a ‘climate watchlist.’ These are 80 or so companies that, combined, represent over 70% of our emissions footprint, so we can be much more targeted with those companies and really push them to that next step. We have been looking at Shell as part of that.”

Resolution Aim

The aim of the shareholders is to inspire other pension schemes and trustees to take appropriate action and focus on those holdings with the most impact on carbon emissions.

In her statement to Pensions Expert Claire Curtin also went on to says: “There is not going to be one party responsible for solving climate change. You need all heads thinking together on a common solution […]. We have got more than 3,000 holdings but if we can focus on a manageable number, then we can really think about challenging some of the responses, or lack of responses coming back, and holding asset managers to account and asking them what they are doing about climate change.”

In addition to urging shareholders and investors to come together to hold more companies to accountable, Curtin highlighted the significance of training and raising awareness among trustees of climate change and its relationship with pension schemes.

The Future

Beyond this filing we are seeing more pension schemes looking to hold companies accountable for their actions regarding climate change. 

The Border to Coast Pensions Partnership, which acts for 11 local government pension schemes managing assets with a combined worth of £40 billion, exercised its voting rights during the 2023 AGM season, to express concern at firms’ approaches to managing the risks of climate change. 

Head of Responsible Investment, Jane Firth, commented: 

“Investors risk giving up value by failing to ask portfolio businesses how they are managing risk. As an active steward of our Partner Funds’ capital, we have a responsibility to clearly express our concerns about the lack of transition progress.  

“Given we consider climate change a critical risk to the long-term success of some portfolio companies, we are using perhaps the most influential means at our disposal – voting – to support credible proposals that are aligned with achieving Net Zero.” 

Currently this type of action of filing resolutions as we have seen in the Shell case seems to mostly involve a commitment to reducing emissions and reducing investment in oil and gas. Moving forwards, we will see if this trend of shareholders and investors taking action to encourage schemes to assist with combating climate change continues. It will also be useful to see the response of businesses to such activity. In this regard,  ExxonMobil has requested a court ruling in the US that a climate resolution (filed by two activist investors requesting medium-term emissions reductions targets) should not be on the agenda of its upcoming AGM. It claims that the investors are abusing the process for proposing shareholder votes to advance their priorities with votes “calculated to diminish the company's existing business.” 

The outcome of these cases are likely to be of interest to other oil and gas companies and climate activist groups. 

Burges Salmon are well placed to advise on all aspects of ESG in relation to pension schemes. If you would like to explore this topic further, please contact Kate Granville Smith.