Shareholder activists in the UK have been encouraged by the level of
support shown at Shell’s annual meeting for a resolution criticizing
the oil giant’s social and environmental performance.
The
resolution, tabled by the Ecumenical Council for Corporate
Responsibility, was defeated, receiving the backing of just six per
cent of those who voted. However, its supporters say the result
represented a rare step forward for UK shareholder activists, given the
‘onerous legal requirements needed to bring a shareholder resolution in
the UK’. In contrast to the US, where social and environmental
shareholder resolutions are relatively common, not one ethical
shareholder resolution was brought in the UK in 2005, according to the
SRI data provider Ethical Investment Research Services.
Eiris head of international relations Stephen Hine told EP:
‘Shell has a huge shareholder base, so it’s quite good to get that
amount of support. In fact, getting it onto the agenda in the first
place was an achievement in itself.’
Hine added that the
outcome, which was widely reported, could prompt activists to table
more resolutions. ‘These sort of resolutions are few and far between in
the UK, so it might encourage more of a culture of shareholder activism
to develop.’
The resolution called for improvements in Shell’s
governance and performance on reaching agreements with local
communities, in its risk and impact assessment, and in the use of its
social responsibility committee. The 199 million votes cast in favour
were dwarved by the 2.7 billion votes against.
But there were 364 million abstentions, so that more than 17 per cent of shareholders did not support Shell management.
A
number of institutional investors chose to support the resolution,
among them Aberdeen Asset Management and the Environment Agency Pension
Fund. Co-operative Insurance Society, Henderson Global Investors and
F&C all abstained from the resolution, which was prompted by
concerns over Shell’s conflict with local communities in Ireland over
the Corrib gas project, in Russia over the Sakhalin oilfield project,
and in Nigeria.
