By John Donovan
Saturday 27 October 2007
A Shell pensioner, Bernie Doeser, a distinguished former senior project manager at Shell, poses an interesting ethical dilemma in a “letter to the editor” published in the current edition of the Shell Pensioners Association news magazine. He questions whether the Shell Contributory Pension Fund (SCPF) should invest taking into account ethical considerations.
Mr Doeser asks whether the trustees should invest in companies that “have a history of polluting the environment”, “support repressive regimes” and “have a poor health and safety record with their employees or customers.”
Based on these three examples from his list, the SCPF would not be able to invest in Royal Dutch Shell Plc. You only have to look at Shell’s track record as recorded in two Wikipedia articles to confirm that Shell fails on all three counts. I refer to the record of Shell’s multi-million dollar fines for pollution, its support of oppressive regimes in Nigeria and Vietnam and its safety record for accident fatalities, which is worse even than BP’S.
The letter from Mr Doeser, which is printed in full below, does not mention investment in companies working in “state sponsors of terrorism countries”, the designation of shame recently given to Shell by the US Securities and Exchange Commission in regard to Shell’s business relationship with Iran.
Royal Dutch Shell is still pressing on with its plans in Iran despite: –
*Iran’s avowed intent to become a nuclear power…
*Sanctions imposed on Iran by the American government…
*Iranian threats to eliminate Israel…
*Iranian capture, exploitation and release for propaganda purposes of British sailors/hostages…
*Iranian supply of roadside bombs to blow up American and British soldiers in Iraq and Afghanistan.
Shell is so desperate to secure hydrocarbon reserves following the 2004 securities fraud, when nearly a third of Shell’s claimed reserves turned out to be illusionary, that it is one of the few oil giants still active in Iran. Such involvement is morally indefensible.
I predict that Shell will soon realise that the continuing relationship with Iran is a major folly and will sever the connection.
THE BERNIE DOESER LETTER
Shell Pensioners Association: Letters to the editor
Autumn 2007 Issue 139
From Bernie Doeser
Doing the right thing
I don’t know about you, I’d expect you are the same as me, but I always try to do the right thing. I’m sure we all do.
So what has this got to do with our pension fund? Well, to put it simply, our pension fund has 10 billion pounds of our money which it has to do something with. And it is our money, not Shell’s. Our trustees have to keep it safe, but also they have to make it grow so that they can pay us our pensions in years to come, and so they invest it. Over half of it is invested in the stock market.
These days investors can have a big influence on the way companies do business.
Sometimes we think we know the right thing to do and we go ahead and do it. On matters relating to our pension fund our trustees make these decisions. They make decisions based upon their own judgement, but do they have the right to do so without asking us? The members of the fund, the one’s whose money they hold in trust?
How should our trustees treat companies that:
• have a history of polluting the environment
• use child or slave labour
• make or sell weapons
• make or sell tobacco or alcohol
• promote gambling
• unnecessarily test products on animals
• are involved in pornography
• support repressive regimes
• discriminate against certain races, religions, sexual orientation or genders
• have a poor health and safety record with their employees or customers
the list goes on.
There are two main approaches that any investor can take. The first is not to invest in companies that have a poor social, environmental and ethical (SEE) record. The second is to invest, but to actively engage with the company management to change their behaviour. This means voting on critical motions at AGMs, having meetings with directors to make your voice known, and speaking out against them when they do wrong. The first approach is easy and cheap to manage – one simply subscribes to a ‘blacklist’ and then screens them out of the portfolio. The second approach takes time and resources, but has the benefit of maintaining a wider shareholding and the possibility of doing some good. Of course the third approach is even easier – do nothing.
The subject of ethical investment is not new. There is a lot of evidence to say that ethical’ companies deliver better returns in the long run. So what is the Shell pension fund doing? I am afraid to say that unlike some of the leading funds from companies like BT it is doing nothing… perhaps the trustees aren’t up to date with the latest research? Or the trustees are afraid of oversight?
When I worked for Shell I was a trustee of the SCPF, so I know that the subject of ethical investment never gets on the trustees agenda. Now that I have retired I am a trustee of FairPensions which is a charity that seeks to help pension funds use their power to promote better corporate social responsibility.
If you feel that the SCPF should invest ethically then please write to the trustees care of Peter Marshall, SPMS, Shell Centre and ask them to consider investing for a better world, particularly as it won’t do any harm to the value of the fund, it may even do it good. You can also e-mail Giles Craven, managing director of the fund directly from the FairPensions website by going to www.fairpensions. org.uk, and clicking on Ask your pension fund to fight corporate abuse’.
About Bernie Doeser: Formerly a member nominated trustee on the board of the Shell Contributory Pension Fund (assets under management of approximately £10bn) Bernie started his career as a research scientist working for Chloride, but became heavily involved in IT during the 1970’s switching career in 1980. Bernie worked in the IT division of Shell for 25 years, until his retirement in 2005.