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April 14, 2010
Shareowner Resolutions Target Four Companies on Oil Sands Development in Canada
    by Robert Kropp

International effort by shareowner activists ask BP, Shell, ConocoPhillips, and ExxonMobil to report on a multitude of risks relating to the environmentally damaging practice.

Described in a 2008 report as "the most destructive project on Earth," oil sands extraction is directly responsible for much of the rapidly increasing greenhouse gas (GHG) emissions in Canada.

According to a shareowner resolution filed at ExxonMobil by Green Century Capital Management, "Oil sands development was held up as a key obstacle to progress in the high-profile Copenhagen (COP15) negotiations, leading to a tarnished reputation for Canada and growing global opposition to the oil sands."

This proxy season, shareowner resolutions targeting oil sands extraction were filed at BP, Shell, and ConocoPhillips, in addition to ExxonMobil. The shareowner action is coordinated by Green Century, the UK-based FairPensions, and the California State Teachers Retirement Fund (CalSTRS).

Trillium Asset Management Corporation, which filed the first shareholder proposal addressing oil sands in 2008 at ConocoPhillips, continues to be a co-filer as well.

According to FairPensions, the practice of oil sands extraction requires the consumption of three barrels of natural gas to create one barrel of oil and leaks approximately three million gallons of contaminated water into surrounding rivers and groundwater each day, in addition to emitting unusually high levels if greenhouse gases (GHG).

The resolution at ExxonMobil asserts that the company faces regulatory risk due to the likelihood of carbon regulation, legal and reputational risk because of the effect of environmental damage to indigenous communities in the affected areas, and financial risk due to oil price volatility and other market forces. Despite these concerns, "ExxonMobil has little to no disclosure on the risks associated with the environmental, social and economic challenges that accompany oil sands development," states the resolution.

Green Century and its co-filers have called on ExxonMobil to prepare a report that discusses the long term risks to the company's finances and operations of its oil sands activities.

Even celebrities are speaking out against oil sands development. Thom Yorke of the rock band Radiohead, who attended the COP15 negotiations and left bitterly disappointed with what he viewed as the failure by world leaders to come to agreement on a meaningful climate treaty, has written on Radiohead's blog of the dangers to institutional investors of investment in companies engaged in oil sands development in Canada.

FairPensions has provided individual investors with the means for voicing their preference as to how their pension funds vote on the shareowner proposals relating to climate change. Pension fund members can email their pension funds directly here.

Shareowner meetings for the four targeted companies will be held on April 15 for BP, May 12 for ConocoPhillips, May 18 for Royal Dutch Shell, and May 26 for ExxonMobil.


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