Church of England to target NatWest, HSBC and Santander over climate ‘backtracking’

The Church of England Pension Board (CEPB) will target directors at banks walking back on their climate commitments this proxy season, starting with NatWest, Santander and HSBC.

“When banks dilute or abandon commitments that investors have understood as being part of the company strategy and risk management approach, it raises serious questions,” Laura Hillis, CEPB’s head of responsible investment said in a statement.

The faith investor is not alone in taking a stance against the banks this year over their climate backtracking.

Last week, Danish fund AkademikerPension announced that it would oppose the chairs at NatWest and HSBC, along with directors at Santander, including the chair of its sustainability committee.

“As an active investor, we have a responsibility to send a clear and strong signal that this is the wrong direction,” CIO Anders Schelde said at the time.

Both CEPB and Akademiker’s decision was informed by recent analysis by ShareAction.

The UK-based campaigner launched a tracker in January to monitor the climate commitments of 34 of the largest banks.

According to the tool, NatWest, HSBC and Santander have all weakened their position on fossil fuels.

HSBC was also found to have “diluted the ambition of its decarbonisation targets”.

CEPB said it will take voting action against the reappointment of directors at banks that “have materially backtracked on their climate commitments” and warned that it will monitor other banks as the proxy season continues.

Hillis stressed that the fund’s action was not about “punishing” companies that failed to meet commitments “despite best efforts”.

“This is about integrity of governance,” she said. “Investors need confidence that directors will maintain consistent, credible oversight of climate and risk policies. Where that confidence is undermined, we will act.”

Akademiker’s Schelde acknowledged that the fund’s vote will not affect the outcome at the banks’ AGMs, but described it as a “strong signal” and a “necessary tool to hold management accountable”.

CEPB’s announcement was welcomed by ShareAction’s senior campaign manager, Kelly Shields.

“The Church of England Pensions Board is right to draw a clear red line when banks quietly weaken the climate plans they once championed,” she said. “Extreme weather is already pushing up insurance costs, disrupting supply chains and driving up food prices, and these risks flow directly into pension pots.”

A spokesperson for NatWest told Responsible Investor that its updated policies “are designed to provide clearer, more practical support while keeping our approach to climate clear and accountable”.

The UK bank has retained its interim 2030 ambition to “at least halve the climate impact of our financing activity”, they added. “We will continue to engage constructively with stakeholders as we make progress on our commitments.”

HSBC and Santander had not responded to a request for comment at the time of publication.