Tar sands – a naturally occurring mixture of sand or clay, water and an extremely dense and viscous form of petroleum called bitumen – cause more damage to the climate than conventional oil.
The greenhouse gas emissions of converting tar sands into fuel is three to five times higher than for conventional oil. The associated pollution, deforestation and disturbance of wildlife also threaten the traditional livelihoods and well-being of indigenous communities.
Take action: outcome
This agm season, fairpensions co-ordinated two shareholder resolutions, asking bp and shell to publish details of the environmental, social and financial risks associated with their tar sands projects.
The resolution was discussed by BP shareholders on 15th April and by Shell shareholders on 18th May. Thanks to thousands of our supporters taking action, last week's Shell AGM saw 1 in 10 shareholders refusing to heed the company's recommendation to vote against the resolution, just weeks after 1 in 7 investors in BP (controlling GBP10 billion in the company's stock) refused to back management on tar sands. These results come despite a massive charm offensive by both companies' "investor relations" teams.
These results - with some of the biggest pension funds in the world supporting our resolutions - are a big achievement, which a number of financial analysts have said will send a strong signal to Shell and BP. Not only is it rare for campaigners to secure sufficient investor support to even have such resolutions discussed, but securing this level of votes (well over 10% in both cases) is also exceptional.
The campaign has had an impact at all levels of the investment chain. The grassroots mobilisation efforts of FairPensions and others prompted over 6,000 people to contact their pension funds and other large BP and Shell investors to express their concerns about tar sands. People contacted us to say that this had caused them to question where there money was invested (at least one even withdrew their pension from a certain fund as a result). Money managers (some of whom said they'd never seen this level of public interest before) were forced to sit up and take notice of the views of the people on whose behalf they invest billions of pounds. In turn, fund managers were forced to ask questions of BP and Shell and focus their attention on tar sands, often for the first time. This unprecedented experiment in investor democracy was a timely effort to ensure that, in the wake of the financial crisis, the City's relationship with major companies receives the scrutiny it deserves.
BP and Shell's response
Both companies rushed to meet with investors following the filing of the resolutions, and made important disclosures as a result. This is particularly true for BP, which had previously employed a 'silent running' tactic - ("whatever you do, don't mention the tar sands!"). As a result of this campaign, BP was suddenly holding high level meetings to explain its Canadian projects with key players in the City. Important new information came to light as a result which will be picked over by oil and gas analysts as well as environmentalists in the months ahead. BP can also expect to come under fire for its reliance on an energy demand scenario that assumes no government action on climate change, entailing a potential global temperature increase of up to 6°C - catastrophic for both people and the planet.
As for Shell, the resolutions prompted detailed disclosures on carbon price, predictions for oil demand, and their Carbon Capture & Storage plans for mining projects. However, they have still failed to say anything to shareholders about how they are managing risks associated with planned tar sands projects which make up the bulk of Shell's tar sands projects, and have higher financial and environmental costs. Investors are also keen to understand how pursuing tar sands projectscan be reconciled with Shell's stated preference for a managed transition to a stable, lower carbon economy.
It's clear that whatever BP and Shell think they've done to reassure investors so far, they have not gone far enough. It's clear that pension funds and fund managers were forced to sit up and take notice of the views of the people on whose behalf they invest billions of pounds. And it's clear that this season of shareholder activism (incidentally, similar resolutions were tabled at Exxon, ConocoPhillips and Statoil as well) has catapulted tar sands up the agenda of BP and Shell, of the City, and of the public.
Looking to the future, several major investors have come out and said publicly that they will be pressing BP and Shell for a much greater level of transparency on tar sands. In turn, FairPensions will be working with pension funds and fund managers to ensure that this kind of scrutiny is indeed maintained, not only on tar sands but also on other environmental, social and governance issues. Furthermore, the tar sands campaign has laid the groundwork for pension fund members to really get engaged with their funds on other issues of concern, and we will continue to work to support people in making their voice heard.
Find out more about tar sands oil and the campaign to halt its extraction