More than 150 investors including local authorities and the Church of England have filed a resolution calling on oil giant BP to assess and manage climate change risks.
The shareholders, which include multibillion-pound pension funds, investors and insurers, have already filed an identical resolution to Shell.
They are calling on the oil companies to transparently “stress-test” their business model against the commitment made by governments not to let global temperatures rise more than 2C above pre-industrial levels – the threshold above which “dangerous” climate change is expected.
BP and Shell must also commit to reducing emissions and investing in renewable energy, and reform their bonus systems so they no longer reward activities which drive climate change, the resolutions urge.
The group, which includes the pension funds for local authorities such as Greater Manchester, Merseyside and Lambeth, as well as the Environment Agency, UK churches including the Church of England and the Methodist Church and charities and foundations, owns around 1% of the companies.
Overseas insurers, church investors and pension funds are also part of the group that has filed the resolutions, which can be voted on by shareholders at BP and Shell’s annual general meetings in April and May.
The group warns that climate change is a major business risk, already hitting physical assets through increasingly extreme weather, while stronger regulation of emissions as the world tries to curb rising temperatures will affect outdated business models.
It is the latest move by investors to put pressure on fossil fuel companies to face up to climate change. A number of institutions including charities and universities have chosen to “divest” their assets from fossil fuels.
Environmental lawyers ClientEarth and responsible investment movement ShareAction worked with the Aiming for A coalition, an investor group with a combined worth of £160 billion, to co-ordinate the resolutions.
James Thornton, ClientEarth’s chief executive, said: “Climate change is a major business risk. BP and Shell hold our financial and environmental future in their hands.
“They must do more to face the risks of climate change. Investors can help them by voting for these shareholder resolutions.”
Howard Covington, former chief executive of New Star Asset Management and a trustee at ClientEarth, said: “The financial risks of climate change are greater in scale and closer in time than most investors realise.
“These resolutions help contain those risks at minimal cost. Investors have every reason to support them.”
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