London CIV backs ClientEarth claim against Shell

London CIV has offered support to environmental law charity ClientEarth in its claim against Shell PLC for what it describes as its “climate risk mis-management” and concerns over its energy transition strategy.

In the letter signed by London CIV’s head of responsible investment, Jacqueline Jackson, it said: “Over the next few years one billion lives and trillions of pounds will be at risk due to a single issue: climate change.

“Recognising the dual materiality of this global emergency and the associated financial opportunities associated with the green transition, London CIV has a fiduciary duty to its 672,000 beneficiaries to understand climate risk, maximise associated opportunities and reduce its carbon footprint.”

The letter goes on to express support for the shareholder claim and to outline LCIV’s own concerns with Shell’s strategy.

“Our 32 client funds hold 484,260 common stock shares in Shell PLC, with a market value of £11,379,290. As at 31st December 2022 Shell PLC contributed 2.31% to the total carbon footprint of LCIV Funds, across scope 1, 2 and 3, with an absolute footprint of 102,422 tCO2e. In a high 2030 carbon price scenario, we calculate that the company’s profit margin would be reduced by 2.59%. Thus, it presents a significant portion of our own footprint and is a primary hotspot of risk and exposure within our portfolio.”

These – and other – concerns were raised in a letter London CIV sent to Shell on 21 October 2022, which has yet to receive a response. London CIV strongly believed that its recommendations would benefit Shell in the long term.

“The unequivocal social and financial impacts of climate change, imposed on future generations will no doubt be compounded by underinvestment in renewables, an absence of meaningful targets and overinvestment in fossil fuels,” Jackson added more recently.

“Long-term investors should not be dazzled by short-term profits today, when the amount reinvested into the solutions of tomorrow is so derisory.”