* Asset manager says capex not aligned with Paris goals
* Sarasin sells $42 mln of shares, reviewing other holdings
By Ron Bousso
LONDON, July 9 (Reuters) - London-based asset managerSarasin & Partners has sold nearly 20% of its holdings in RoyalDutch Shell, saying the oil and gas company's spendingplans are out of synch with international targets to battleclimate change.
The 33.8 million pounds ($42.1 million) sale represents afraction of Shell's $261 billion market value.
But it is a rebuke of Shell's strategy less than a yearafter the Anglo-Dutch company, together with a large group ofinvestors including Sarasin known as Climate Action 100+, agreedon a landmark resolution outlining Shell's ambition to reducecarbon emissions.
Sarasin is reviewing its remaining holdings in Shell ofaround 120 million pounds, according to a spokesman.
"We have been supportive of your recent leadership insupport of the Paris Climate Accord," Sarasin said in a July 8letter to Shell Chairman Chad Holliday, seen by Reuters.
"However, we were extremely disappointed that, despite yourpublic commitment to act on climate change, the strategy thatShell published at its Management Day on 4th June aims todeliver rising fossil fuel production to at least 2030."
Shell plans to increase its annual spending between 2021 and2025 to $30 billion, excluding major acquisitions, compared witharound $25 billion in recent years. Of the $30 billion, $2 to $3billion will go towards power and renewables.
"While Shell cannot, of course, bring down global fossilfuel use on its own, it needs to ensure it is not contributingto the problem," the letter said.
News of the sale was first reported by the Financial Times.
Shell said the divestment was "disappointing".
"Shell plans to reduce the Net Carbon Footprint of theenergy products we sell in step with society's progress towardsmeeting the Paris Agreement."
"We are very clear that this requires both sustaininginvestment in our core Upstream businesses as well as growinginvestment in our customer-facing transition businessesincluding Integrated Gas, Oil Products and Chemicals," it said.
Adam Matthews, director of ethics and engagement at theChurch of England Pension Board who co-led negotiations withShell on the climate resolution, said engagement with Shell was"very much ongoing."
"Clearly Shell are an industry leader, but we are keen tosee further steps related to alignment of capital expenditure,"Matthews said in a statement.
Catherine Howarth, chief executive of climate activist groupShareAction, welcomed Sarasin's move.
"Sarasin's forcefully argued challenge to Shell's board ontheir capital expenditure plans should reverberate across thewider investment community," Howarth said.
The Paris agreement seeks to reduce greenhouse gasemissions, most of which come from the burning of fossil fuels,to a net zero by the end of the century to limit global warmingto "well below" 2 degrees Celsius.
($1 = 0.8029 pounds)(Reporting by Ron Bousso; Editing by Mark Potter)
