New wave of global investors support BP oil sands resolution

With a week to go before BP's annual general meeting, a growing wave of support from global investors is emerging for the resolution - co-ordinated by FairPensions and opposed by BP management - questioning the company's planned oil sands projects.

Top U.S. pension funds worth hundreds of billions of dollars, including CalPERS, CalSTRS, Connecticut Retirement Plans & Trust Funds, New York State Common Retirement Fund and the Vermont Pension Investment Committee have declared that they are voting in favour of the BP oil sands resolution. Australian investors including AMP Capital Investors' Responsible Leader Investment Funds, Christian Super, and Local Government Super are also supporting the BP resolution.

Jack Ehnes, CEO of the California State Teachers Retirement Fund (CalSTRS), said:

"The environmental risks associated with oil sands development comes with long-term financial risk for the CalSTRS portfolio. We support all resolutions requesting greater disclosure on oil sands-related risks and encourage institutional investors to vote YES in support of these proposals".

Through the PRI Clearinghouse, international investors joined together to publicly support a vote in favour for the oil sands risk assessment resolution tabled for BP's annual general meeting on April 15th as well as for Shell's upcoming meeting in May. Investors involved include Boston Common Asset Management, Calvert Asset Management Co., Inc., Co-Operative Asset Management, Ethos Foundation, Green Century Capital Management, SNS Asset Management, Trillium Asset Management Corporation, Unison Staff Pension Scheme, and Walden Asset Management.

The support statement highlights that:

"There are grounds to believe that these risks are potentially material to BP and Shell, but neither company has given a consistent account of how their oil sands investments square with their respective views on the preferred transition to a lower-carbon energy economy nor have they adequately disclosed to investors how they plan to manage regulatory and physical risks over the long-term".

35 North American investors have also taken the extra step of sending a letter to BP expressing support for the resolution and calling on BP to step up their engagement efforts with North American investors on this issue. Signatories include official co-filers, Boston Common Asset Management, Christian Brothers Investment Services, and MMA Praxis Mutual Funds, who all felt it important to provide a voice for other U.S. investors who were not able to co-file.

Lauren Compere, Managing Director, Boston Common Asset Management, who is coordinating the initiative in the United States, said:

"Despite the fact that 38% of BP's shareholders are based in the U.S., the company's outreach to its North American investor base has been very weak. We feel that this letter is needed to allow non-U.K. investors a voice in pre-AGM engagement with BP. As long term investors, we want to ensure that BP's portfolio projects remain robust against a range of scenarios. We do not feel that they have demonstrated this adequately - even with some of the subsequent information they have released. We also remain concerned about carbon intensity and resulting costs as BP has not yet adequately explained how they can ensure carbon intensity levels at the figure they suggest (5 %). "

Proxy Governance, a US proxy voting agency, has also recommended that its clients support the BP resolution. This mounting support contrasts with UK proxy voting agency RiskMetrics' recommendation to its clients to vote against the BP resolution.

Louise Rouse, Director of Investment Engagement at FairPensions, said:

"RiskMetrics' recommendation contains significantly contradictory advice: on the one hand it encourages BP to make precisely the sort of disclosures which investors are seeking by way of the resolution and yet RiskMetrics advise a vote against. We are puzzled as to why RiskMetrics do not regard supporting the resolution as an appropriate way for investors to encourage the required greater disclosure".

Although the filing of the resolution has prompted valuable dialogue between investors and the company, many investors do not feel that adequate disclosures have yet been made by BP to satisfy their concerns.

View the shareholder resolutions

View PRI Clearinghouse statement

View the letter sent to BP