GLOBAL - Investors have grouped against energy giant BP to justify potential environmental damage in the firm's bid to drill for oil in the Alaskan Arctic National Wildlife Refuge.
Both institutional and private investors have filed a resolution - coordinated by the World Wildlife Fund (WWF) - which also calls on BP to disclose how it measures the risk to shareholder value from drilling in other environmentally or culturally sensitive areas.
BP is lobbying for access to drill for oil in the Refuge - the only part of Alaska’s North Slope currently off limits to explorations. Environmentalists argue that several rare species and Alaska natives, the Gwich’in people, will be endangered if the project is not modified.
WWF UK chief executive Robert Napier, said: “BP cannot afford to rest on its green credentials and must disclose how it decides whether or not to drill for oil in the most environmentally important areas in the world.
“These decisions could jeopardise shareholder value, and in light of this BP must recognise the legitimacy of shareholder concern.”
The resolution reflects investment guidelines set out by the Association of British Insurers (ABI) which encourage companies to adopt best practice and fuller disclosure when responding to such risks. Companies are urged to confirm that any risks have been assessed in their annual reports.
Director of corporate governance at BP shareholder Friends, Ivory & Sime (FIS), Richard Singleton, said it was “out of character” for BP to have allegedly refused a meeting with the WWF to discuss the resolution:
“Mindful of the significant amount of work that BP puts into trying to be a good corporate citizen, we believe that it will have a great deal to say in response to its resolution.
“But, we have been somewhat surprised at the suggestion that it declined to meet with WWF to discuss the need to file the resolution.”
SRI managers FIS, which holds approximately 1% (£900m) of BP, added that it had not made any decision concerning the resolution and would wait for in-depth discussions with the company.
So far the resolution is supported by investment companies and environment groups including: WWF; RSPB; The Joseph Rowntree Charitable Trust; US Public Interest Research Group; Trillium Asset Management; Walden Asset Management of Boston; the Green Century Balanced Fund; Ethos Funds of Switzerland; Ethical Funds of Canada; Enterprise Foundation of the Rockerfeller Family Fund; Clean Yield of Vermont Catholic Healthcare West; members of the Interfaith Center of Corporate Responsibility; corporate governance activist Robert Monks, and more than 115 private UK investors.
Shareholders will vote on the resolution at BP’s annual general meeting on April 18.
By Madhu Kalia
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