Tar Sands Shareholder Proposals Pick Up Steam in 2010
In a show of how seriously investors, environmentalists and advocates are looking at the environmental costs and financial uncertainties associated with tar sands, support has grown dramatically for shareholder resolutions filed at major oil companies. This movement parallels increased activity on the part of more than 50 nongovernmental organizations working to slow down the expansion of tar sands projects.
Extracting oil from tar sands, also known as oil sands, is an energy-intensive and damaging process, whereby oil that is mixed with sand, clay, other mineral sediments and water is separated often using hot or warm water. The oil is either extracted using strip mining or using deep wells that often require high pressure steam to encourage oil flow. The processing has outsized impacts on air, land and water systems, and contributes higher lifecycle greenhouse gas emissions than conventional oil.
Trillium Asset Management Corporation (“Trillium”) has filed resolutions at ExxonMobil and ConocoPhilips, and signed letters of support for two resolutions at Shell and BP.
In 2008 and 2009, Trillium acted as the “lead filer”* of a resolution calling for a report on the environmental and social impacts of the company’s oil sands extraction. In both years, support reached about 30%, which is quite high for a shareholder resolution addressing an environmental issue. Last year, there were nine co-filers; this year, the California State Teachers Retirement System (CalSTRS) has stepped up to act as lead filer, and additional 10 co-filers have signed on.
Trillium has signed on as a co-filer on this first-year resolution, sponsored by Green Century Capital Management, along with 8 additional co-filers. The proposal calls for a report “discussing possible long term risks to the company’s finances and operations posed by the environmental, social and economic challenges associated with the oil sands”. The resolution can be found here.
Trillium has signed a letter of support for a resolution co-filed by two British shareholders, The Ecumenical Committee for Corporate Responsibility and FairPensions UK, asking Shell to produce a report detailing how a decision on oil sands projects took into account “future carbon prices, oil price volatility, demand for oil, anticipated regulation of greenhouse gas emissions and legal and reputational risks arising from local environmental damage and impairment of traditional livelihoods.”
Trillium supports a resolution filed at BP that calls for a report detailing BPs decisions to press forward with tar sands development, specifically the Sunrise project. Trillium has been pressuring BP for years, as one of a group of signatories of a letter presented at the 2008 annual stockholder’s meeting expressing disappointment in the companies move into tar sands.
Investor briefings in support of the resolutions can be found at http://incr.com/resolutions.
“Tar Sands Development Stickier Than Anticipated,” Investing For A Better World, Spring 2008.
“ConocoPhillips Shareholders Show Strong Support for Tar Sands Proposal,” May 2009.
“Investors Decry BP’s Entry Into Tar Sands,” April 2008.
* “Lead filers,” as the phrase implies, take a leadership role in drafting shareholder proposals and negotiating dialogue with company management to identify conditions that might lead to a withdrawal. Co-filing shareholders typically take a less active role in the process.