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The Observer: Investors to attack Shell over environment

Investors to attack Shell over environment

John Madeley
Sunday May 7, 2006
The Observer

Royal Dutch Shell will come under pressure from shareholders at its annual meeting in The Hague and London on 16 May to clean up its environmental act.

A strongly worded shareholder resolution calls for 'a major improvement in Shell's performance in terms of community and stakeholder consultation, risk analysis, and social and environmental impact analysis'.

And the oil and gas company is facing a double whammy over its performance: an EU-funded project, Advance, has assessed the environmental performance of 65 European manufacturers for 'sustainable value', or non-financial corporate performance in monetary terms. The highest ranked company at present, getting a sustainable value of more than €26.1bn, is DaimlerChrysler. Shell ranks lowest on the list, with a negative value of €180bn.

Advance claims the survey is the most comprehensive of its kind, but Shell says it does 'not take full account of sustainability practices, as its focus is quite narrow, and in such a limiting survey the oil and gas sector will factor poorly'.

The shareholder resolution was initiated by the faith-based Ecumenical Council for Corporate Responsibility, which has monitored Shell for years and has the backing of 130 of its shareholders, representing almost a million shares.

The council claims that Shell's Corrib pipeline project in County Mayo, Ireland, 'indicates a policy deficit' with regard to accepting environmental impact assessments done by other firms. It also points to oil spills on Sakhalin Island, Russia, and to last December's contempt of court proceedings filed against Shell Nigeria for its 'failure to stop the flaring of poisonous waste gases' in the Niger Delta.

Shell says it is committed to complying 'with all relevant local standards'.

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