Sixty global investors have called on the oil and gas industry to do more to tackle climate change, ratcheting up pressure on company boards ahead of several high profile annual shareholder meetings.

The investors said companies needed to be more transparent about how they plan to change their operations as part of the global shift to a low-carbon economy, necessary to meet the terms of the 2015 United Nations sponsored Paris Agreement on climate change to keep global warming below two degrees Celsius.

“As long-term investors, representing more than US$10.4 trillion in assets, the case for action on climate change is clear,” the investors said in an open letter published in the Financial Times newspaper and reported by Reuters Newsagency.

It comes as oil major Royal Dutch Shell faces a shareholder challenge over climate change, as investors insist oil and gas firms should offer more transparency and action on carbon emissions.

A growing number of pension funds have backed a resolution at Shell’s AGM on Tuesday that calls on the company to set tougher carbon targets that are in line with the goals of the Paris Agreement.

The proposal has been backed by the Church of England, the Dutch pension fund Aegon and, most recently, Nest, the workplace pension scheme set up by the United Kingdom government, which has £7 million invested in Shell.

Mark van Baal, the founder of Follow This, a Dutch campaign group that brought the resolution, said: “Investors have a choice: vote for Shell’s ‘whatever world’ or vote for the world of the Church of England, a world in which all companies set targets to limit climate change to well below 2.0°C.”

“We are keenly aware of the importance of moving to a low-carbon future for the sustainability of the global economy and prosperity of our clients,” the investors said in their letter, adding related regulations would create additional costs to the industry.

Among leading investors to sign the letter were Aberdeen Standard Investments, AXA Investment Managers, Fidelity International, Legal and General Investment Management, Schroders and Kames Capital.

The oil and gas industry and its products account for 50 per cent of global carbon emissions, and so the most effective strategy for companies to take was to reduce the carbon impact of its products, the letter said.

“The capital allocation decisions they make today are important to determine how likely they are to survive that transition,” it added.

The issue has formed a central part of corporate engagement for many of the investors ahead of the season for Annual General Meetings (AGM).

BP holds its AGM today, with Royal Dutch Shell following on Tuesday, at which shareholders are set to vote on whether the company should set firm carbon emissions targets linked to the Paris Agreement.

“Regardless of the result at the Shell AGM, we strongly encourage all companies in this sector to clarify how they see their future in a low-carbon world.

“This should involve making concrete commitments to substantially reduce carbon emissions, assessing the impact of emissions from the use of their products and explaining how the investments they make are compatible with a pathway towards the Paris goal.”

The letter also urged policymakers to take “clearer and more collective action” to implement regulation supporting investment in lower-carbon technologies and would talk with companies and maintain oversight of their actions.

“The broad support for this letter sends one clear message, investors are embracing their responsibility for supporting the Paris Agreement.

“It is time for the entire oil and gas industry to do the same,” a spokesman for Newton Investment Management, one of the signatories, told Reuters.