The Church of England Pensions Board has announced it will vote against the reappointment of directors at major banks that have materially weakened their climate commitments. The decision, set to take effect during the 2026 Annual General Meeting (AGM) season, targets institutions seen to be diluting fossil fuel restrictions or scaling back previously stated environmental targets.
The Pensions Board, which manages approximately £3.4 billion, will initially oppose relevant board items at NatWest, Santander, and HSBC. To inform its voting, the Board is utilising ShareAction’s “When Banks Step Back” dataset, which tracks instances where global lenders have retreated from net-zero ambitions. This move follows a broader trend of investor scrutiny after several high-profile banks withdrew from international climate alliances or revised their green financing policies.
The Board’s stewardship framework treats climate change and nature loss as systemic risks that require accountable governance. By conducting bespoke assessments—including the use of the TPI Banking Tool—the Board intends to identify specific directors responsible for weakened policies and escalate its concerns by voting against board chairs or members of risk and sustainability committees.
“Good governance is the first line of defence against systemic risk. 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 about board oversight, risk management, and long-term strategic resilience,” said Laura Hillis, Managing Director, Responsible Investment at the Church of England Pensions Board.
She added, “This is not about punishing companies who haven’t been able to meet their commitments despite best efforts. This is about integrity of governance. Investors need confidence that directors will maintain consistent, credible oversight of climate and risk policies. Where that confidence is undermined, we will act.”
