GLOBAL - Several major US pension funds and Australian superannuation investors are the latest players to back a call for BP to report further information on the implications of extracting oil from tar sands.
BP will face a motion tabled by UK lobbying body FairPensions at its AGM later this week calling for the company to report details of the financial, environmental and social risks of using tar sands from next year.
The California Public Employees' Retirement System (CalPERS), the California State Teachers Retirement System (CalSTRS) and the Vermont Pension Investment Committee have now thrown their weight behind the campaign and the BP oil sands shareholder resolution, along with Australian investors including AMP Capital Investors, Christian Super and Local Government Super funds.
"The environmental risks associated with oil sands development comes with long-term financial risk for the CalSTRS portfolio", said Jack Ehnes, CEO of the California State Teachers Retirement Fund (CalSTRS).
"We support all resolutions requesting greater disclosure on oil sands-related risks and encourage institutional investors to vote YES in support of these proposals".
This latest move comes after the UK's major local government pensions body, the Local Authority Pension Fund Forum, said it is backing BP, rather than the highly-publicised campaign, as its questions and concerns have now been answered. (See earlier IPE story: LAPFF opposes oils sands campaign and back BP)
The campaign has sparked talk about the use of tar, or oil, sands as a method for extracting oil and its impact on both the environment and its accompanying financial effect. Yet FairPensions claims investors still want to see improved disclosures about the long-term implications of such activity.
In particular, FairPensions still claims resolution co-filers feel both BP and Shell - which has the same resolution tabled at its May AGM - are risking financial damage in the long-term by developing what some see to be unsustainable assets.
The concerns are focused around the high costs of extracting and converting oil sands, and the risks to future profitability presented by rising carbon emissions costs, alongside uncertainty about future oil demand, and legal and reputational risks arising from environmental damage and impairment of indigenous community livelihoods.
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