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Politicians Boost Investors’ Oil Giant Revolt

THE WALL STREET JOURNAL

By Phil Craig
Of FINANCIAL NEWS


UK politicians today backed a shareholder revolt against oil giants BP and Shell, giving a substantial boost to demands that the companies assess the risks associated with their controversial investments in Canada’s tar sands.

A cross-party group of MPs has today published an Early Day Motion, a means by which politicians can raise an issue in parliament, calling on the parliamentary pension fund to vote in favour of shareholder resolutions requiring the oil giants to report on their tar sands projects.

Liberal Democrat MP Simon Hughes, the shadow secretary of state for energy and climate change, said: “Tar sands are a very risky investment ??? financially, environmentally and socially. The resolutions ask BP and Shell to report to their investors on how they are managing these risks.

“Government should lead by example and be a responsible investor; for this reason it is essential that the MPs’ pension fund supports these resolutions.”

Tar sands, also known as oil sands, have attracted substantial attention from campaign groups. Canada’s tar sands are one of the largest proven sources of oil in the world after Saudi Arabia’s reserves, but converting tar sands into a usable form of oil produces many more greenhouse gases than extracting oil by other means.

So far six MPs have backed the motion ??? the maximum allowed before a motion is tabled. They include members of the Labour, Conservative and Liberal Democrat parties. Other MPs are now free to back the proposal.

The involvement of the parliamentary pension scheme would add substantial weight to the revolt, which is organised by FairPensions, a campaigning organisation focused on encouraging ethical investment practices. A spokesman for FairPensions said that some sovereign wealth funds are also interested in supporting the resolutions, but declined to name which funds are considering the proposals.

The coalition already includes the Co-operative Asset Management, the Unison Staff Pension Scheme, Rathbone Greenbank, CCLA Asset Management and other fund managers, foundations and faith groups that declined to be identified.

BP and Shell have confirmed that the resolutions are valid, and will be discussed at their annual general meetings, in April and May respectively.

A spokesman for BP said that the company is in discussions with shareholders about the issue. Shell declined to comment for this article.

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