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shareholder activists take heart at Shell AGM vote

June 2006

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.



Further Information
http://www.eccr.org.uk
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