This is an exciting and historic day for the UNISON staff pension fund and for UNISON members. I am immensely proud to be taking part in my first company AGM as a share owner, BP is my company and our staff fund owns 1.25 million shares, along with many others we will be taking the argument on to the floor of the meeting. This is the first ever share owner resolution filed by the fund and the first share owner campaign organised by the Capital Stewardship Programme for rank and file members and pension fund activists.
In a unique collaboration with Fair Pensions we have pulled together fellow share owners, trade unions, first nation people's organisations and environmentalists to raise the issues of our company's tar sands production. Over 5,000 people including over 1,000 UNISON members have emailed their pension funds requesting they vote for our resolutions.
Many of our members' funds have failed to listen to these requests. They should have taken their lead from the Environment Agency Pension fund, which has five UNISON reps on the investment committee and is the world's leading environmental investor, in a press release yesterday the fund announced it was voting in favour.
They said..."We support the concern of other shareholders that the Board’s of BP and Shell have not disclosed all the economic, social and environmental assumptions as to the risks and costs that that have formed their business strategy and financial projections relating to investing in the extraction of oil from tar sands.
"We are concerned by not fully disclosing this information to shareholders that shareholder value could be negatively affected both now and in the future, and this is not in the best long term financial interests of our pension fund members. Moving to a lower carbon economy is good for the planet, business and long term investors. We have therefore decided to vote FOR the shareholder resolutions at the Annual General Meetings of BP and Shell". It is to the other funds shame that they haven't followed this lead.
Pension funds from the US and Australia say they will back a resolution, the California Public Employees' Retirement System (CalPers), the California State Teachers' Retirement System (CalStrs), and the Vermont Pension Investment said on Tuesday they will vote in favour of the resolution – which BP management is opposing – as will the Local Government Super in Australia.
The UNISON staff fund is a signatory to the UNPRI, our resolutions are all about putting those principles into action – active ownership, collaboration with investors, transparency and accountability. Recent legal opinion tells us that not only are environmental and social issues legitimate matters for fiduciaries to raise, but it would be a breach of duty not to consider them, so compelling is the evidence that they can build or destroy shareholder value
Our view on universal ownership takes this one step further, the externalities generated by companies ultimately have to be accounted for across the whole economy – as long term investors, pension funds can choose either to pick up the tab or intervene to lift the trend-performance and obtain efficient and sustainable growth
The banking and financial collapse demonstrates to us what happens to shareholder value – and pension benefits - when we choose to chase the bottom line; toxic assets created in America ended up in our members’ pension fund and contaminated all markets; we owned the banks that created these products and we bought the bad debts at the same time; the universal investor cannot afford repeated market failures on this scale
We’re now facing a natural resources crunch – dwindling and harder to extract fossil fuel resources combined with ecological processes that can’t cope with excess CO2 in our atmosphere; as with financial products, global regulators let alone the state of Alberta have yet to get their act together post Copenhagen and universal investors have a duty to understand these risks and protect their investments across the board.
We own a slice of BP, but we also own a slice of the global economy which depends on the development of a sustainable energy strategy. There is little in BP’s disclosure to reassure us that oil sands will not decisively contribute to that tipping point, or that the economics of the project stack up once lifetime, well-to-wheel, costs have been factored in; future oil demand itself is naturally constrained; profitability will require inflationary oil prices that could hurt all sectors in which we have holdings.
So we are not anti-oil, we recognise that it has to fuel the global economy in the short to medium term, but we do want to see our energy companies make strategic decisions now to fund the technological innovations that will bring us an affordable, low carbon energy supply – sinking capital in the sands doesn’t answer that strategic call.
We fundamentally believe that the interests and rights of the first nations people must be acknowledged, respected, upheld and preserved.
We call on BP to meet the terms of the resolution and provide the evidence we need to be satisfied our members’ assets are secure and will produce the returns they need.
The Capital Stewardship Project was created to establish a new path for the union to take. These are our first steps on it for UNISON which seeks to make sure our pension funds invest in our interests and our companies operate in the same way.
For more read:
http://unisonactive.blogspot.com/2010/04/bp-under-pressure-from-global-public.html