UK - The Local Authority Pension Fund Forum (LAPFF) has advised its members to oppose a shareholder resolution at BP's annual general meeting (AGM) in April calling for more disclosure on the oils sands project.

UK lobbying group FairPensions has filed resolutions at the oil company's AGM calling for the firm to commission a review of the risks relating to the project and how they are managed, and to publish the underlying assumptions on why the development is taking place. (See earlier IPE article: Campaign targets members to drive pension fund voting)

However, the LAPFF - whose 52 local authority members have combined pension assets of more than £90bn (€101bn) - has issued an alert suggesting its members should oppose the resolution as BP had provided it with "sufficient evidence that its approach was well-grounded".

The body said it has been involved in a "prolonged engagement" process with BP over the issue, and following meetings with both BP representatives and the shareholders behind the resolution, admitted the resolution raised some "important issues" but claimed BP had already disclosed a great deal of information on the issue.

The LAPFF also argued there is no evidence that BP has adopted a position not supported by technical and economic research, and said the oil company has met the local requirements set by government on protecting the environment and local communities.

It added that because of the disclosure already provided and the willingness to engage with the LAPFF and other investors on the issue, it felt "the spirit of the resolution had been met".

Councillor Ian Greenwood, chairman of the LAPFF, said: "We welcome the proponents' initiative and believe this has served to focus attention on an important long-term issue for shareowners. However, on this occasion, following extensive engagement with the company, the Forum believes a vote with management is appropriate."

But Duncan Exley, director of campaigns at FairPensions, said the move was surprising as the LAPFF has stated it is supportive of companies providing further disclosure yet argued it is rejecting a resolution that asks for exactly that.

"The LAPFF is saying BP has disclosed everything necessary, but there's still a lot of things BP has not disclosed. Some of their assumptions on demand are assuming a situation that is not likely to happen. Some things just don't stack up," claimed Exley.

He also said a large number of local government pension scheme members have become involved in FairPensions' 'Tar Sands Counting the Cost'  campaign where members are encouraged to email their pension funds. "Thousands of actions have been taken, and it would be polite for the LAPFF to acknowledge the concerns of the members that they are acting on behalf of," said Exley.

While the LAPFF is siding with BP, Exley revealed it is continuing talks with a number of international local government pension fund groups that he says appear to be supportive of the resolution, although they are "keeping their own counsel".

Exley questioned how shareholders could encourage the company to provide more disclosure if the LAPFF and others do not support the resolution.

He noted a large coalition of investors, with more than $3trn (€2.22trn) in assets, have written to all the oil companies raising concerns on the oil sands issue, while engagement by large investors has been ongoing for some time, including investors such as the Irish National Pension Reserve Fund (NPRF). (See earlier IPE article: NPRF already aware and engaged on tar sands issues)

Exley said: "If resolutions are not the way to tackle this issue, then they are falling back on things like engagement that have not worked. This is a big project and investors need reassurance. This is the reason why a lot of investors came to us, as they had participated in engagement but still had concerns. That's why we scheduled the resolution. There comes a time when you have to step things up."

Have Your Say:

Julian Poulter, business director at The Climate Institute in Australia, said: "The Climate Institute in Australia has become heavily involved in this issue - we have advised several partner funds on the issue and believe it is worth supporting. Two Australian funds are now supporting this - the Local Government Super and the Christian Super."

"I am surprised at the LAPFF's position given that they state they support further disclosure but are voting with management on the resolution. How can shareholders assess whether or not BP is spending their capital wisely without data on the two biggest risk areas - carbon and oil price assumptions? This is all very strange and I think this issue is a forerunner given it goes to the heart of viability of these types of investments."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email