(January 18, 2010) - A coalition of
institutional and individual investors has succeeded in filing a
resolution for the forthcoming AGM of Royal Dutch Shell plc,
calling on the company to report on the investment risks associated
with its Canadian oil sands projects.
The resolution comes amid growing questions from investors,
analysts and NGOs about the financial, environmental and social
implications of these projects.
The resolution's 142 co-filers include fund managers, pension
funds, foundations and faith groups. Major backers from the
investment world include The Co-operative Asset Management, the
UNISON Staff Pension Scheme and a significant contribution form
Rathbone Greenbank clients. The initiative is co-ordinated by
FairPensions, which is urging investors to vote for the resolution
and to engage with other energy companies with similar operations
to address the financial and other risks involved.
The oil sands are the second largest oil resource in the world
comprising some 173Bn barrels in reserves. Converting it into
usable form of fuel produces on average 3 times the greenhouse gas
emissions compared to conventional oil extraction. Even using the
oil industry's favoured measure from oil well to car exhaust oil
from this source emits between 15% and 40% more greenhouse gases
than the average of conventional sources.
Industry claims about the affordability and
efficacy of carbon capture and storage as a solution to oil sands'
financial and environmental problems are also increasingly
questioned.Canada is already on course to miss its Kyoto
protocol targets and the expansion of oil sands will make all but
impossible any efforts to cut emissions on 1990 levels. Oil sands
are now prompting legal challenges from local indigenous
communities such as the Beaver Lake Cree Nation, who are affected
by pollution, deforestation and wildlife disturbance from oil sands
developments. They claim breaches of the constitutional rights
protecting their traditional livelihoods.
The resolution and accompanying supporting statement raise
"concerns for the long-term success of the company arising from the
risks associated with oil sands", specifically pointing to expected
carbon price rises, oil price volatility, expected fluctuations in
demand, regulation of greenhouse gas emissions, and the legal and
reputational risks arising from environmental damage and impairment
o traditional livelihoods. 30% of Shell's total reserves are
in oil sands, which also have particularly high operating
costs.
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