A group of activist shareholders and workplace and church-based pension funds have kept up pressure on the UK banks previously leading on climate initiatives over their policy changes, taking a stand at their annual meetings.
The re-election of NatWest chair Rick Haythornthwaite at its meeting on Tuesday showed signs of a protest vote with support down to 92.1 per cent compared with 97.63 per cent the previous year, based on provisional results.
Church of England Pensions Board director of climate and the environment Laura Hillis said the vote reflected a level of disappointment, particularly among individual minority shareholders.
“It doesn’t sound that low to the average person . . . but it takes a lot to prompt an investor vote against any director, but particularly a chair,” she said.
Investors co-ordinated by ShareAction and managing $1.38tn in assets, including Nest, the UK’s largest pension scheme by membership, and asset manager Rathbones, told the meeting they were concerned by the bank’s shift on lending risks “at such a critical point in the energy transition.”
Jeanne Martin, head of ShareAction’s banking programme, said the transition to clean energy “creates a significant risk of stranded assets, exposing lenders to potential losses, particularly from the fossil fuel sector”.
ShareAction had recommended voting against the re-election of Haythornthwaite, as well as against HSBC chair Brendan Nelson and the group risk committee director at its annual meeting next week.
NatWest briefly adjourned the meeting on Tuesday after a series of vocal interventions by environmental activists, including from XR Edinburgh.
Haythornthwaite, who spent 17 years at BP, told shareholders that the bank was still driven by its goal to at least halve the climate impact of its financing activity between 2019 and 2030.
“I don’t want us to take what sounds like backtracking as being a major shift, these targets matter and will dictate the way we’re going,” he said. “I take climate change very very seriously, as does all this board . . . We feel we have found a pragmatic middle world.”
UK and European pension funds and asset managers have diverged from US counterparts on climate policy, most recently evident in a heavy defeat for the BP board at its annual meeting last week.
Those institutions concerned about bank policies have argued that a rollback since the election of US President Donald Trump, and his support for fossil fuels, has created unacceptable levels of climate-related risk to balance sheets and lending portfolios.
In February, NatWest widened its criteria for oil and gas financing and ditched targets to cut emissions from sectors including aluminium, cement and iron and steel.
A person close to the NatWest Group’s climate strategy told the FT that the bank’s credit experts recently identified US liquefied natural gas infrastructure as an area of business opportunity, even as the climate team flagged climate risk concerns.
NatWest said: “We have refined our approach to ensure it reflects the evolving policy environment, the complex and diverse needs of the transition, and the areas where we can deliver the greatest impact for customers.”
The Nest pension scheme updated its voting policy following NatWest’s shift to make it clear that it could take action to vote against the chair of a company that had scaled back climate strategy without adequate explanation.
Santander non-executive director Sol Daurella Comadrán, who leads the sustainability and culture committee, received 96.5 per cent approval at the bank’s annual meeting last month, or at least two percentage points below other board members up for re-election. This follows the scale back of Santander’s climate policy outlined in February.
The Church of England Pensions Board, which oversees £3.5bn in assets, voted against Comadrán and said it intended to vote against directors at NatWest and HSBC. HSBC and Santander did not immediately provide a comment.
These banks had been early adopters of climate targets and restrictions at the peak of the movement to apply environmental, social or governance criteria to lending decisions.
HSBC, Barclays, NatWest and Santander were among the founding members of the Net-Zero Banking Alliance in 2021, which folded last October after high-profile departures by some of the biggest US lenders.
HSBC scaled back its own climate ambitions late last year. Earlier this month, investors wrote to the UK’s accounting regulator, the Financial Reporting Council, asking it to review whether HSBC may have understated climate risk in its accounts.
Barclays, which has also been targeted by activists in the past as a major lender to the fossil fuel sector, holds its meeting next week. A report by campaigners last year found Barclays was Europe’s biggest financier of fossil fuels in 2024, boosting its activities by 55 per cent to $35.4bn.
Barclays said at the time that it sought “to meet consumer and businesses energy needs while financing the scaling of clean energy”.
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