Shell dumped by Church of England pensions board on ESG concerns

The Church of England Pensions Board will offload its stake in Shell Plc as part of a total exit from oil and gas, as the investor turns its back on companies it says are failing to address climate risks.

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It’s now clear that Shell and a number of its peers don’t have “sufficient ambition to decarbonize in line with the aims of the Paris Agreement,” John Ball, chief executive officer of the Church of England Pensions Board, said in an emailed statement on Thursday.

Shell said last week it intends to devote an ever larger chunk of annual spending to oil and gas, a strategy that’s been dubbed “catastrophic by climate activists.”

Shell says it can still deliver on its pledge to shareholders to eliminate emissions by mid-century, but didn’t say how. At the same time, the company signaled it will restrict spending on renewable energy projects to those it thinks can compete with the returns of its fossil-fuel business.

The decision to divest from oil and gas due to the sector’s failure to live up to a number of environmental, social and good governance considerations marks a rare exit by the Church of England Pensions Board, which typically prefers to engage with companies to help them transition. Other notable divestments to date include iron ore and nickel producer Vale SA.

The Church of England Pensions Board most recently held £1.35 million ($1.73 million) across equity and debt in Shell, and about £7 million in equity and debt across oil and gas companies in its common investment fund, it said.

“There is a significant misalignment between the long term interests of our pension fund and continued investment in companies seeking short term profit maximization at the expense of the ambition needed to achieve the goals of the Paris Agreement,” Ball said.

“Recent reversals of previous commitments, most notably by BP and Shell, has undermined confidence in the sector’s ability to transition.”

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