Between lax engagement and complete divestment: is there a third way?

Reclaim Finance argues that neither passive engagement nor complete divestment is sufficient to force oil and gas companies to align with the Paris Agreement. Instead, it advocates for a 'third way' where investors stop purchasing new bonds but retain shareholdings to vote against directors, manager remuneration, and dividends at 2024 annual general meetings. The organization highlights that 96% of oil and gas producing companies continue to open new fields and that record profits are being prioritized for shareholder remuneration over the energy transition.

• Major pension funds are divesting from the oil and gas sector due to the perceived inability of companies like BP, Shell, and TotalEnergies to align their business models with the Paris Agreement. Examples include Pensioenfonds Zorg en Welzijn (PFZW) divesting €2.8 billion from 310 companies, ABP divesting €15 billion, and the Church Commissioners for England divesting from companies lacking a 1.5°C aligned strategy.
• The oil and gas industry is not in a genuine transition; 96% of producing companies continue to open new fields, and majors are accelerating LNG development. Furthermore, companies including BP, Shell, and TotalEnergies have backtracked on climate ambitions, with TotalEnergies increasing oil and gas production targets despite shareholder resolutions.
• Complete divestment is viewed as potentially too slow to effect change because it would take years or a 'critical mass' to create sufficient financial pressure, and it removes the investor's ability to influence companies through shareholder power.
• Reclaim Finance recommends that climate-responsible investors use their shareholder power to sanction companies at 2024 annual general meetings by voting against the re-election of directors, manager remuneration increases, and dividend distributions, while simultaneously halting the purchase of new bonds.
• Since the post-pandemic recovery, oil and gas companies have allocated more of their record profits to shareholder remuneration and fossil fuel expansion than to sustainable energy, decarbonization, or infrastructure closure.

APA

Martin, L. (2024). Between lax engagement and complete divestment: is there a third way? Reclaim Finance. https://reclaimfinance.org/site/en/2024/02/13/between-lax-engagement-and-complete-divestment-is-there-a-third-way/

Chicago

Martin, Léo. Between lax engagement and complete divestment: is there a third way? Reclaim Finance, 2024. https://reclaimfinance.org/site/en/2024/02/13/between-lax-engagement-and-complete-divestment-is-there-a-third-way/.

Wikipedia

{{cite press release |last1=Martin |first1=Léo |title=Between lax engagement and complete divestment: is there a third way? |publisher=Reclaim Finance |date=13 February 2024 |url=https://reclaimfinance.org/site/en/2024/02/13/between-lax-engagement-and-complete-divestment-is-there-a-third-way/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{martin2024between, author = {Martin, Léo}, title = {{Between lax engagement and complete divestment: is there a third way?}}, publisher = {Reclaim Finance}, year = {2024}, month = feb, url = {https://reclaimfinance.org/site/en/2024/02/13/between-lax-engagement-and-complete-divestment-is-there-a-third-way/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }