BP and Shell shareholders are being urged to reject remuneration packages that reward senior executives for replenishing fossil fuel reserves.
A report released by ShareAction today says executive pay policies being put to a binding vote in 2017 fail to acknowledge changes required from the oil majors to achieve long-term commercial resilience and sustainable returns.
In April the £14m pay package of BP chief executive Bob Dudley was rejected by 60 per cent of shareholders in an advisory vote.
The binding vote is part of a policy introduced by the coalition government in 2013.
Former Investment Association chief executive Daniel Godfrey says: “The binding votes on pay at BP and Shell pay next spring are a crucial opportunity for shareholders, many of whom want to see evidence of the companies’ ability to adapt to a low carbon economy. Realigning incentives is central to that.”
ShareAction chief executive Catherine Howarth says investors that were serious about climate change had a chance to “walk the talk” on the issue at the shareholder meetings.
BlackRock faced criticism this month for releasing a report on climate change on the same day its voting record at Exxon Mobil revealed it had failed to vote against motions that represented climate risk.
This week, Australian finance group Market Forces released a report stating fossil fuel executives are being offered “expansion” bonuses that incentivise risky exploration projects.
The report says that despite publicly pledging support for keeping global warming below 2 degrees, not a single Australian superannuation fund had voted down remuneration packages on climate change grounds.