A special resolution has been filed by 143 shareholders for BP's annual meeting on April 15, demanding the company provide a full report by next year about the risks of its planned tar sands development in Canada. London: Large shareholders will be pitted against each other this week in a row over oil giant BP's involvement with tar sands in a battle that is set to dominate this year's round of company annual meetings.
A special resolution has been filed by 143 shareholders for BP's annual meeting on April 15, demanding the company provide a full report by next year about the risks of its planned tar sands development in Canada. The Local Authority Pension Fund Forum (LAPFF) has sparked conflict in the normally torpid world of institutional investors by calling on the 52 schemes it advises to vote with BP's management, saying talks with the company suggested its approach to oil sands was "well-grounded". But the Merseyside Pension Fund, which holds the deputy chair position of the LAPFF and is one of the largest in the UK, has decided to abstain, as has the London Borough of Camden Fund. The Environment Agency Pension Fund, also a member of the LAPFF, has said it supports the campaigners. International investors including some large Australian pension funds, the Swiss Ethos Foundation and dozens of large pension funds and ethical fund managers in the US are expected to come out in support.
Mercer Investment Consulting has taken the unusual step of writing to 120 big investors asking how they intend to vote at the BP and Shell AGMs. Environmentalists do not expect to win the day at the BP meeting as most of the conventional City shareholders are likely to line up behind management. But significant support for the resolution will be an embarrassment to the oil company. Campaigners have already scored a partial victory. Shell, where a similar resolution is being tabled at the AGM on May 18, responded by publishing a report on its tar sands extraction a year sooner than requested. Investors say it has not addressed all their concerns but its report is a positive move. Emma Howard Boyd, head of socially responsible investment and governance at Jupiter Asset Management, said: "We have engaged extensively on this issue and have been impressed by Shell's response."
BP said it is briefing investors and has published a raft of information. But campaigners are not satisfied it has provided adequate disclosure. The action is being backed by celebrities including impressionist Alistair McGowan and musician Thom Yorke of Radiohead. McGowan said: "[Tar sands projects are] environmentally, socially and economically unsustainable. I think the grilling that BP and Shell are getting is well deserved, and I hope investors keep up the pressure."
Other supporters of the action include Conservative parliamentary candidate and green campaigner Zac Goldsmith, along with the Co-operative Asset Management, a group of religious investors and the pension scheme of Unison. Lobby group FairPensions has launched a pioneering internet initiative for pension fund democracy, supported by the Observer, to mobilise ordinary members to email their schemes if they wish to support the resolutions.