Per my disclosures, I own a small amount of BP PLC ADS. Maybe because it is a foreign issue, I didn’t find BP as I tried to use MoxyVote.com but I was able to see how CalSTRS voted at ProxyDemocracy.org. Frankly, I’m not as informed as I would like to be, especially with regard to the directors.
I know that investors from both sides of the Atlantic have filed resolutions for the BP, Shell, ConocoPhillips and ExxonMobil annual general meetings, which ask the companies to report on the financial, environmental and social risks associated with their oil sands investments. FairPensions UK, the California State Teachers Retirement Fund (CalSTRS), and Boston-based Green Century Capital Management (Green Century) are coordinating the shareholders’ efforts.
At BP, the only oil company I own, this resolution is identified on the ballot as SPECIAL RESOLUTION: TO INSTRUCT A COMMITTEE OF THE BOARD TO REVIEW THE ASSUMPTIONS BEHIND THE SUNRISE SAGD PROJECT.
Canada’s tar sands are the second largest oil resource in the world, with 173Bn barrels in reserves. However, extraction is energy-intensive and environmentally-damaging, requiring deforestation, extensive water use, and the creation of massive amounts of toxic waste. Even using the most conservative lifecycle analysis, oil from this source emits between 15% and 40% more greenhouse gases than the average of conventional sources, raising doubts about the long-term economic viability of oil sands development. Local indigenous communities affected by oil sands pollution and ecological harm, such as the Beaver Lake Cree Nation, have filed legal challenges that could drastically slow or halt oil sands development. BP has responded, but not to my satisfaction.
Frankly, I trust the analysis done by CalSTRS, FairPensions UK, and Green Century on this issue. “Shareholders must know how companies are preparing for these costs and mitigating future risks,” says Emily Stone for Green Century. Mindy S. Lubber, president of Ceres and director of the $8 trillion Investor Network on Climate Risk (INCR) says,
Investors are concerned that many companies seem to be moving ahead without a well-articulated plan to manage the environmental and social risks associated with the oil sands. Given the extra-long investment horizons of oil sands projects, it is especially important for companies to invest in solutions to these challenges upfront.
I recall my dad, an engineer, showing me some of the oil sands when we visited his brothers in Canada about 50 years ago. He was very skeptical concerning our ability to extract the oil without ruining the environment. I’m not sure we’re there yet. Since I’m voting with CalSTRS on this shareowner resolution, I’m also going with them and voting against all the director nominees and several management proposals as well.
If you are in the UK, I urge you to go to FairPensions on this issue. Click the take action button. From there, you can send a message to your own pension scheme to try to get them onboard with this issue at BP, Shell, ConocoPhillips and ExxonMobil. I wish we had a similar advocacy organizations in the US.
hey jim, nice piece!