Shareholder abstention on oil sands resolution fires BP warning shot

Shareholders gave BP, the oil giant, a warning yesterday that the controversial issue of oil sands extraction in Canada will figure as a major future talking point, when more than 15% of the share register withheld support from management over an investor campaign for better information on associated economic and environmental risks. Just over 6% of shareholders voted in favour of the resolution for further disclosure on carbon and oil price assumptions at BP’s planned $2.8bn Sunrise SAGD development, a 50/50 venture with Canada’s Husky Energy. However, a further 9.2% of shareholders abstained from voting – generally taken as a warning sign of disgruntlement with the company’s approach. The combined figure is an unusually high level of protest for a UK annual general meeting (AGM) and followed one of the biggest recent investor AGM campaigns on an increasingly contentious issue. The investor campaigners were led in the UK by FairPensions, the pressure group and the Co-Operative Asset Management, but supported by numerous US, Australian and European institutions. The campaigners said an e-mail petition had seen more than 5,000 people writing to their pension providers and other large BP shareholders to back the resolution.Karina Litvack, head of governance and sustainable investment at F&C Asset Management, one of the UK’s biggest managers, said it had abstained on the resolution in recognition of BP’s improved transparency on Canadian oil sands. But she added: “We credit this shareholder proposal for having prompted a more productive stance by the company on investor engagement. However, F&C feels that the company still falls short in certain important respects of the standard of disclosure that we believe was requested in this resolution. “We want to take this opportunity to encourage BP to take a more prominent leadership role in industry-wide efforts to find ways to better manage the cumulative impacts of oil sands development in Canada.”
Investors have filed a similar oil sands resolution at Shell’s AGM on May 18th.
Responsible-Investor yesterday reported that the giant $140bn California State Teachers Retirement Fund (CalSTRS), has taken the position of lead filer of a further resolution at ConocoPhillips’ AGM on May 12th and is calling for institutional investors to back it. A resolution has also been filed at ExxonMobil’s AGM on May 26th.