LAPFF, a forum organization representing UK local authority pension funds and pool companies with over £300 billion in AUM, announced its opposition to energy company Shell’s climate transition plan. The forum has recommended that its members vote against the plan at Shell’s upcoming AGM.

Earlier this month, Shell became the first major energy company to announce plans to bring its energy transition strategy to a shareholder vote, bringing the company in line with an emerging movement among companies and investors to improve transparency and accountability on climate by including shareholders in corporate sustainability plans.

Shell has committed to achieve net zero emissions by 2050, and released its strategy detailing its plans, including short-, medium-, and long-term emissions reduction goals, the company’s decarbonization strategy and milestones, and its capital allocation plans.

According to a statement by LAPFF, however, Shell’s strategy “does not sufficiently address the challenges Shell faces with competition from renewable energy potentially putting fossil fuel businesses out of business on cost grounds alone,” and creates the risk of the company ultimately being burdened with stranded assets.

While LAPFF supports the ‘Say on Climate’ principle, the forum takes issue with several aspects of Shell’s plans, including its significant reliance on carbon capture and storage, and nature based solutions through very large amounts of tree planting, which it could not reconcile with credible areas of land and the short timescale outlined.

While opposing the Shell resolution, LAPFF recommends shareholders support a resolution by advocacy group Follow This, which proposes Shell introduce near and medium-term absolute emissions reduction targets.