The Church of England Pensions Board has decided to vote against the reappointment of directors at three high street banks, citing backtracking on climate commitments, and plans to monitor other banks’ reporting as the AGM season continues.

At this year’s annual general meetings, the church’s Pensions Board looking after £3.4bn of assets will vote against relevant people and items at NatWest, HSBC and Santander.

The Board will incorporate ShareAction’s ‘When banks step back’ dataset, which lists where global banks have weakened climate-related policies, diluted financing targets for sensitive sectors, or stepped back from previously stated commitments.

Laura Hillis, the Board's managing director responsible investment, said 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,” Hillis said.

“We recognise that circumstances materially change in some cases. This is not about punishing companies who haven’t been able to meet their commitments despite best efforts. This is about integrity of governance,” she added. “Investors need confidence that directors will maintain consistent, credible oversight of climate and risk policies. Where that confidence is undermined, we will act.” 

The Church of England Pensions Board’s stewardship framework stresses that climate change, nature loss and social instability are systemic risks that require strong governance from companies. 

The Board said it will conduct bank-specific assessments using both ShareAction’s dataset and the Transition Pathway Initiative Banking Tool to:  

The fund has a policy of engagement, but says that if a company does not respond or it judges the response to be insufficient, “we may escalate by casting our votes against management’s recommendation at the company AGM or by supporting a shareholder resolution”, noting that this would usually be done alongside direct engagement.

“Ultimately, and as a last resort, we may disinvest,” it adds. The fund says while this does not change a company’s practices, “disinvestment can send a clear message and means we no longer have investments in companies that are not addressing issues that are important to us”.

The trustees have previously shown they are among the few investors willing to take drastic action where they do not see the case for long-term value creation and sustainability. In 2023, the Board committed to selling all of its oil and gas equity and debt, arguing that no oil and gas company is aligned to net zero over the short, medium and long term. The move followed concerns that these firms had missed an opportunity to invest heavily in the low carbon transition when their profits skyrocketed in 2022.

ShareAction's voting recommendations include RBC, as well as the three banks cited by the church’s Pensions Board, and it said it has identified ‘backtracking’ at Commerzbank.

Kelly Shields, senior campaign manager, said the Church of England Pensions Board was right to draw a red line when banks weaken climate plans they once championed.

“Extreme weather is already pushing up insurance costs, disrupting supply chains, and driving up food prices, and these risks flow directly into pension pots. When directors make decisions that expose people’s pensions to long‑term risk, they should expect scrutiny, not a free pass,” she said.

Shields urged other pension funds to join the CoE Pensions Board: “With AGM season around the corner, this approach sends a clear signal: accountability still matters. Other pension funds have the same tools, and they must use them to protect savers and push banks to stay on track.” 

For Santander, whose AGM is on 27 March, ShareAction recommends voting against the re-elections of Sol Daurella, Carlos Barrabés and Gina Díez Barroso, saying the bank has been “ramping up” its fossil fuel financing since 2022, no longer has generally applicable restrictions on oil and gas companies, has removed requirements for clients to have targets to phase out thermal coal mining by 2030, and has dropped its absolute financed emissions target for the oil and gas sector, replacing it with a physical emissions intensity target.

A Santander spokesperson argued Santander “has been one of the most active banks in financing the build-out of renewable energy capacity for decades”, saying the bank has provided more renewable energy project finance than any bank in the world in 2025, citing market data provider Infralogic, and has raised or facilitated €174bn (£151bn) in green finance since 2019.

“We are well on track to reach the €220bn target by 2030,” the spokesperson said.

They added: “Our lending policies are reviewed regularly by the board to ensure we support clients and markets in different stages of transition. Our approach reflects the fact that an orderly and just transition depends on economic growth to finance investments, and on governments setting policy frameworks that support and incentivise the market to drive change.  Growth, and fighting poverty, relies on secure and affordable energy - especially in developing and emerging markets.”

For NatWest, Share Action recommends voting against Rick Haythornthwaite as chair at the AGM on 28 April, saying the bank has removed restrictions on oil and gas financing, weakened prohibitions on shale fracking and removed aluminium, cement, iron and steel, and shipping from its sectoral decarbonisation targets.

A spokesperson for NatWest Group said: “As previously announced, we reviewed our climate ambitions, targets, and wider environmental and social policies last year. Following this review, 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 spokesperson said the bank is keeping its interim 2030 ambition, to at least halve the climate impact of its financing activity against a 2019 baseline, as it works towards its 2050 net-zero ambition.

  

“Overall, our updated policies are designed to provide clearer, more practical support while keeping our approach to climate clear and accountable. We will continue to engage constructively with stakeholders as we make progress on our commitments,” the spokesperson said.

For HSBC, which has its AGM on 8 May, ShareAction recommends voting against Brendan Nelson as chair and against the re-election of James Forese as director, among others saying the bank has “significantly weakened its oil and gas policy” and removed an explicit expectation that non-EU/OECD clients demonstrate plans to phase down their thermal coal assets if they have no phase-out commitment.

HSBC has been contacted for comment.