The Church of England has won an unprecedented victory on climate change after it successfully helped bring about a change in policy from BP.
At the oil giant's annual general meeting, BP investors overwhelmingly backed a resolution that means the company will have to change the way it reports to shareholders on climate change.
This was the first time in the UK that a group of institutional investors has filed a shareholder resolution on an environmental issue. It was also the first time that such a resolution has been approved by a company's investors.
Edward Mason, head of responsible investment at the Church Commissioners, who manage the Church of England's £6.1 billion assets, said: "The vote was unanimous. The resolution was supported overwhelmingly by 98 per cent of investors. BP itself recommended to shareholders that they back the resolution."
The Church of England's national investing bodies have led three years of engagement with BP over climate change.
Writing on a Church of England blog about the practical difference the resolution will make, Mason said BP will have to improve disclosure in areas such as how it is reducing its own emissions, whether the projects the company is investing in will be viable in a low carbon economy, on the approach to investment in low carbon energy, on what incentives the board is offering directors during the low carbon transition and what kind of public policy the company is lobbying for.
"This is a step change in the relationship between BP and its investors on the issue of climate change," he said. "On the back of this disclosure, investors will be able to judge whether BP is positioning itself to be a sustainable player in the energy system. The disclosures that result from this resolution will facilitate in-depth discussions between the company and its investors on long-term strategy in an increasingly complex and fast changing energy environment.
"Climate change will have a permanent seat at the board table. It will be a permanent feature of investor engagement.
"The answers for energy companies on climate change are not easy. But investors must ask the questions. Today investors have started to do so."
The Aiming for A investor coalition and NGOs ShareAction and ClientEarth welcomed the decision, which far exceeded the 75 per cent vote required to make it binding. The coalition includes The Church of England's investing bodies along with the £160bn Local Authority Pension Fund Forum and wealth managers Rathbone Greenbank. The coalition was launched in 2012 to engage on climate change with the ten largest extraction and utilities companies in the FTSE 100.
Catherine Howarth, Chief Executive at ShareAction, said: "BP's AGM promises to be an important day for shareholder democracy. Dozens of small shareholders played a crucial role in filing this shareholder resolution, and thousands of pension savers have petitioned their schemes to vote in support. Climate change is everybody's business, and today proves it."
Julie Tanner, assistant director of Catholic responsible investing at US Christian Brothers Investment Services, said: "Given the pivotal role that business can play in addressing climate change, it is imperative that effective shareholder collaborations like the ones developed by members of the Interfaith Centre on Corporate Responsibility and the Church Investors Group continue and grow."
The Shell board has also recommended that investors back the same resolution at that company's AGM on 19th May.
