Mercer quizzes fund managers over controversial tar sands BP/Shell AGM resolutions

Consultant asks managers to indicate which way they will vote and why.

Mercer Investment Consulting, one of the world’s biggest advisors to institutional investors, has taken the unusual step of writing to about 120 global and UK equity managers asking them how they intend to vote at the annual general meetings of BP and Shell on the growing shareholder revolt over controversial tar sands projects in Canada. The consultant said it had asked fund managers to explain the “rationale” for their voting decision, although the consultant said it did not itself take a position on the tar sands issue nor advise on specific shareholder voting issues. Danyelle Guyatt, Mercer’s head of research for Responsible Investment, told RI that the initiative was driven by client demand. She said it was an attempt to improve voting transparency: “This is something that consultants should be doing more of.” The investor campaign to force BP and Shell to report on potential investment risks associated with tar sands projects was given political impetus in the UK last week when a group of Membersof Parliament demanded that their own Parliamentary Pension Fund back resolutions put down at the forthcoming BP and Shell AGMs on April 15th and May 18th respectively. US investors have also joined the campaign, which is being co-ordinated by FairPensions, the NGO-backed campaign group and supported by UNISON, the UK and Europe’s biggest public sector union with more than 1.3m members and the Public and Commercial Services Union (PCS), the fifth largest trade union in the UK with over 300,000 members. Other coalition members include Greenpeace, WWF and Co-operative Asset Management, which is joint-filing the resolutions. Separately, Mercer’s responsible investment (RI) team is looking to hire a consultant to evaluate investment managers of alternative thematic investment products. Mercer said the role would mainly focus on research into thematic funds such as clean technology, microfinance, sustainable forestry, carbon trading, social infrastructure and sustainable property.