"No company planning to extract new oil and gas can possibly be in compliance with the Paris Agreement," the clergy letter said. "It is vital that the Church of England's National Investing Bodies now fully divest from fossil fuel companies, given the 2023 deadline" set by church officials to divest from oil and gas companies not aligned with the Paris Agreement.
The letter acknowledged engagement efforts by Church of England Pensions Board to get companies to step up energy transition plans, but said that "the corporations have not responded to shift their activities at the speed and scale that is required."
Criticism of fossil fuel companies' plans to address climate change and prepare for the energy transition came to a head Wednesday when Shell said in an investor update that it will continue investing in fossil fuels while pledging to "create more value with less emissions" and increasing shareholder returns.
Several large institutional investors, including the Church of England Pensions Board and Border to Coast Pensions Partnership, Leeds, England, a pool of local authority pension funds with £60 billion ($74.5 billion) in combined assets, voted against Shell's latest energy transition plan at the company's May 23 annual meeting. The pensions board is part of Church Commissioners for England, which has £10.3 billion in assets.
Until 2021, the Church of England Pensions Board was co-leader of Shell engagement for Climate Action 100+, and it supported the company's 2021 climate transition plan, saying that it was a first mover on several fronts, including offering a shareholder vote on a transition plan.
"While the plan was not perfect it was positioning Shell as a constructive actor in shaping the long term transition. However, today, we see a different path being taken," the pensions board said in a statement after the annual meeting.
"Despite Shell posting record profits in 2022 and having the highest capital expenditure of $25 billion among its peers, its capital expenditure into renewables and low carbon energy is far lower than would be expected by a company seeking to shape a future in the transition," and Shell is investing the most of its European peers in upstream oil and gas production, the statement said.
"Although we were willing to offer you our support in the past, today we cannot … We are also prepared to restrict investment in the company if we do not see a change in direction."