In addition to the mass protesting (XR rebellion, BLM and Kill the Bill demonstrations) in the UK it is important to continue to monitor shareholder activism and the pressure it applies to many companies during their AGM season. Most AGMs are scheduled for the first quarter of the new financial year, and as such, the likes of Barclays, Shell and BP have all held theirs with many more companies to follow. The latest ‘greenwashing’ theories suggest companies that propose climate resolutions should be scrutinised and held to account during an AGM to ensure they meet the Paris Agreement criteria. 1

James Chen writing for Investopedia, describes shareholder activism as

“a way that shareholders can influence a corporation’s behaviour by exercising their rights as partial owners… they typically buy up a minority stake in a company and, subsequently, employ a variety of tactics, from media pressure to litigation threats, to force a conversation and bring about change… from environmental concerns to governance to profit distribution to the internal culture and business model of a company.”2

Looking at those AGMs particularly targeted by the likes of activist group ShareAction: BP, Shell and Barclays have received social media posts encouraging applications for proxy votes, threatening lawsuits and explaining how activists can fully engage with the AGM process. 3

Shell’s AGM voting results show that whilst concern was expressed for their climate resolution strategy their shareholders, followed the direction of its board and voted in favour of its proposal with 89% of the vote. This was in part, suggests August Graham writing for The Evening Standard, because Shell had the support of
‘Climate Action 100+’

“an influential coalition of investors which includes the Church of England Pensions Board among others.”

The ‘Church of England Pensions Board’ stated

“As a Pensions Board we have today supported the Energy Transition Strategy, not because we believe it is perfect, but it is the first phase of Shell’s transition over this crucial decade.”4

BP also a faced a shareholder resolution from climate activist group ‘Follow This’ who received 20.6% of the shareholder vote representing one fifth of BP shareholders – an increase in support of 12.2% from 2019 when the last resolution was tabled – 79.4% of BP shareholders voted in favour of BP’s proposal. BP has said it

“will continue to engage with shareholders on our strategy, targets and aims so as to ensure their views are fully understood.”5

HSBC went further to avoid activist intervention at their AGM this year by amending and making improvements to its climate policy in advance. A move applauded by Jeanne Martin, Senior Campaign Manager at ShareAction, who said,

“Today’s announcement shows that robust shareholder engagement can deliver concrete results and sets an important precedent for the banking industry. Net zero ambitions have to be backed up with time-bound fossil fuel phase-outs and today HSBC has taken an important step in that direction.” 6

Barclays has been heavily criticised of late because of its lack of policy changes in line with the Paris Agreement,

“The bank has provided more finance for coal mining and coal power than any other UK bank since 2015, and its funding for ‘extreme’ fossil fuel… increased by 32 per cent in 2020 compared to 2019” 7

and this is reflected in their AGM voting results, 14% voted against the bank’s recommendation on climate change giving Barclays a 76% approval vote.

This reporting highlights there to be a correlation between shareholder engagement and support for a company’s climate policy. The more involved a company is with their climate strategy (such as Shell and Climate 100+) the more potential the result from the shareholders will be positive. Those who see an on-going climate dialogue are more likely to be encouraged by it. A less engaged company can result in lower approval levels despite the board’s recommendations being passed and poor performance and low engagement with shareholder activists can influence changes to structure of a board if this is coupled with poor performance.