More than £20bn of UK pensions invested in Shell

Written by Lori Campbell on 23rd May 2023

More than £20 billion of UK pension money is invested in Shell, new research reveals.

The average UK pension pot has £905 invested in the oil giant, according to Make My Money Matter (MMMM) – a campaign founded by Love Actually director Richard Curtis.

However, a poll of UK pension holders by MMMM found the majority (58 per cent) had no idea where their money is invested. Just over a fifth said they would switch pension providers if they found out their savings were invested in Shell.

Shell is facing a revolt in its annual general meeting (AGM) today from investors calling on the oil major to do more, faster, to hit net zero emissions. Investors will also vote on pay packages for Shell’s top earners, including that of outgoing chief executive Ben van Beurden, who took home $12 million (£9.7 million), including a $9.3 million (£7.5 million) bonus.

Tony Burdon, chief executive of Make My Money Matter, said: “The pensions industry is adamant that only through engagement can they really make a change in how fossil fuel companies act. Well, now is the moment for it to put its money where its mouth is.

“That’s why Make My Money Matter is calling on the industry to finally flex its muscles in boardrooms this AGM season and vote to make Shell and its polluting peers do better, to protect members savings and our planet. Because you can’t claim to be a leader on climate but continue to support the directors of companies who are driving fossil fuel expansion.”

The Good Guide to Pensions

Shell is under fire for posting record profits as it reaps the benefits of higher energy prices, while everyday consumers suffer with the cost-of-living crisis. Government pressure on oil companies’ commitments to cutting emissions relaxed following Russia’s invasion of Ukraine, as the priority shifted to producing secure oil and gas pipelines. But at the same time, the war fuelled a huge rise in energy bills for households and businesses.

Share prices of energy firms like Shell and BP have rocketed in the last two years as investors flock to what they consider to be a safe haven of good returns. In February, Shell reported profits of $39.9 billion (£32.2 billion) for 2022 – double the previous year’s total and the highest in its 115-year history. Several pension schemes have announced plans to vote against Shell’s directors for failing to ‘sufficiently act on the climate crisis’.

Nest – the UK’s largest pension scheme with 12 million members – and London CIV, which together represent almost £78 billion of pension money, are joining forces with the Church of England Pensions Board and Brunel Pensions Partnership to vote against directors at Shell’s AGM.

Nest will also voice support for a resolution filed by FollowThis, calling on Shell to update its climate targets to align with the Paris Agreement. Shell claims it “supports the most ambitious goal of the Paris Agreement”, which is to limit the rise in global average temperature this century to 1.5C above pre-industrial levels.

Katharina Lindmeier, Nest’s senior responsible investment manager, said: “Following their record profits, we’d hoped Shell would step up their activities towards meeting their net zero ambitions. Instead, they’re kicking the can down the road and increasing the risks on long-term shareholders.”

Top UK pensions failing on climate action

Both Nest and London CIV will vote against the re-election of Shell’s chair Sir Andrew MacKenzie, supported by investment adviser PIRC, in a bid to hold directors accountable for climate inaction.

Many investors in Shell will welcome the boost to their savings that has come from a $4 billion (£3.23 billion) share buyback. However, 44 per cent of the 2,000 people surveyed by MMMM said they think their fund should vote against Shell’s directors at the AGM.

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