Shareholders drop resolution on BP’s Gulf oil spill

The shareholder resolution calling for BP to assess its operations in the wake of the Gulf of Mexico oil spill last year has been dropped.

Instead the investors hope to engage with the company – using “tried and tested local stewardship approaches” – in the hope that the company demonstrates it is systematically addressing its operational and strategic risks. If that approach fails they say they will revert to a US-style shareholder resolution at BP’s 2012 annual general meeting.

“If BP fails to demonstrate board oversight and improve disclosure by the fall, there will be a shareholder resolution led by the Interfaith Center on Corporate Responsibility/Church Investors Group in 2012,” said Julie Tanner, Assistant Director of Socially Responsible Investing at the $4bn Christian Brothers Investment Services, which spearheaded the original 2011 AGM resolution.

That resolution, reported by Responsible Investor in December, had called for BP to review its risk assessment and risk management plans at its major projects in North America.

The UK’s Church Investors Group has assets of around £12bn (€14bn) while the US Interfaith Center on Corporate Responsibility represents around $100bn (€73.3bn) of assets.

Also involved were the €25bn Finnish pension insurerIlmarinen, the Swiss pension fund-backed Ethos Foundation and sustainable asset management specialist Calvert, Mennonite financial services group Everence and investor coalition Ceres. Campaign group FairPensions was assisting with the “paperwork”.

BP’s AGM is likely to take place in mid-April. The new agreement, brokered by CCLA, the investment management firm which specialises in charities, faith organisations and local authorities, will result in new ways for church investors to “hold multi-nationals to account” said Bill Seddon, vice chairman of the Church Investors Group.

Calvert and the Ethos Foundation back the new approach. “We look to BP to make binding commitments to strengthened board oversight and management of safety and environmental risk,” said Bennett Freeman, Senior Vice President at Calvert.

“While we’re pleased that BP wants to restore public trust, shareholders require meaningful engagement and disclosure of goals in order to monitor progress,” added Ethos’ Executive Director Dominique Biedermann.

In 2010, shareholder-led resolutions on the Canadian tar sands issue at BP and its rival Royal Dutch Shell helped put the issue on the map. But the tar sands issue has since been overshadowed by the Deepwater Horizon spill which claimed 11 lives and generated headlines for BP for months.