FOR IMMEDIATE RELEASE
One Year After Gulf Oil Spill, BP Facing Investor Frustration Over Lack of Disclosure on Risk Management
Institutional Investors Join Proxy Voting Agencies in Registering Dissatisfaction with Votes on BP’s Accounts and Reports and Other Ballot Items
BP Stock prices fell by more than 50% after the Deepwater Horizon oil rig exploded, killing 11 people and spilling nearly 5 million barrels of oil into the Gulf of Mexico.
On the one-year anniversary of the BP oil spill in the Gulf of Mexico, an international coalition of leading socially responsible investors, led in the US by Christian Brothers Investment Services, Inc. (CBIS) and the MMA Praxis Mutual Funds, recommended to vote against or abstain from the BP accounts and reports and members of BP’s Safety, Ethics and Environmental Assurance Committee (SEEAC) at the company’s upcoming annual meeting.
While identifying many risks and challenges, BP’s recently released annual report provides shareholders with an insufficient level of detail to determine how the company’s safety and risk management function has been strengthened; how it is being evaluated, managed, and mitigated; how the board will oversee it; and how progress is to be assessed and measured.
CBIS, MMA Praxis, Ethos Foundation and other investors from across Europe and the U.S. have announced they will vote against or abstain from BP’s annual report in response to BP’s failure to address these issues. This news follows the release of voting recommendations from major proxy voting agencies that voice similar concerns and urge abstentions or votes against BP’s annual accounts and reports and/or BP’s remuneration proposal and key board positions, particularly members of the SEEAC.
Glass Lewis, which advises institutional investors that collectively manage more than $17 trillion in assets, has recommended a vote against the report as has PIRC, a leading U.K.-based research and advisory consultancy providing services to institutional investors on corporate governance and corporate social responsibility. According to Glass Lewis: "We believe that shareholders should voice their opposition to these deficiencies by rejecting the Company’s accounts and reports as a form of protest against the Company’s continual failure to correct these issues to satisfaction.”
“We do not think the annual report demonstrates what BP is doing to address the issues that have dominated headlines in regards to the oil spill. It does not do enough to provide investors with critical information or confidence that risk has been mitigated and that board oversight has been strengthened,” said Julie Tanner, Assistant Director of Socially Responsible Investing at CBIS. Ms. Tanner will attend the BP Annual Meeting in London on April 14 to share the coalition’s concerns with the company.
“BP has experienced a string of troubles in the U.S., of which the Gulf oil spill is the latest,” said Mark Regier, Director of Stewardship Investing at MMA Praxis Mutual Funds. “In light of the devastating human, environmental and financial impacts these events have produced, we expected to see more than a list of activities. We need to see clear objectives and solid metrics, so have chosen to vote against BP’s accounts and reports and members of SEEAC.”
Bill Seddon, Vice Chair of the UK Church Investors Group (CIG) and CEO of the Central Finance Board of the Methodist Church (UK), explains: “Concerns remain about BP’s disclosure, and we will be joining other CIG members in voting against the re-election of the chair of the board’s safety committee.”
Investors have also raised concerns over BP’s lack of information on transitioning to a low-carbon economy, which the annual report states is central to the company’s long-term strategy. The company has not provided detailed information about this transition or explained what initiatives it will undertake to begin moving towards this goal. BP’s new oil exploration venture with Russian-based Rosneft seems to contradict its own board-defined strategy.
"BP must be more forthcoming with investors not only on its offshore risk management, but also about its plans for reducing its total reliance on oil," said Mindy S. Lubber, president of Ceres and director of the $9.5 trillion Investor Network on Climate Risk (INCR).
To read an in-depth analysis of the BP Annual Report related to disclosure associated with safety and risk, board oversight, climate change and the Gulf, please visit: www.cbisonline.com/page.asp?id=1095.
The members of the coalition that have announced they will vote against or abstain from BP’s annual accounts and reports, in response to BP’s failure to address these issues, span investors across Europe and the U.S., and include the following members of the Interfaith Center on Corporate Responsibility (ICCR):
- Christian Brothers Investment Services, Inc. (U.S.)
- Bon Secours Health System, Inc. (U.S.)
- Catholic Health East (U.S.)
- Catholic Health Partners (U.S.)
- CHRISTUS Health (U.S.)
- The Ecumenical Council for Corporate Responsibility (U.K.)
- Ethos Foundation (Switzerland)
- Everence Financial - MMA Praxis Mutual Funds (U.S.)
- Mercy Investment Services, Inc. (U.S.)
- Sisters of St Francis of Philadelphia (U.S.)
About Christian Brothers Investment Services
Christian Brothers Investment Services, Inc. (CBIS) is a leader in Catholic socially responsible investing (SRI) with approximately $4.0 billion in AUM for more than 1,000 Catholic institutions worldwide, including dioceses, religious institutes, educational institutions and health care organizations. CBIS' combination of premier institutional asset managers, diversified product offerings, and careful risk-control strategies constitutes a unique investment approach for Catholic institutions and their fiduciaries. CBIS strives to integrate faith-based values into the investment process through a disciplined approach to socially responsible investing that includes principled purchasing (stock screens), active ownership strategies (proxy voting, dialogues, and shareholder resolutions) and community investment. Visit CBIS at www.cbisonline.com.
About Everence and MMA Praxis Mutual Funds
MMA Praxis Mutual Funds, advised by Everence Capital Management, is a faith-based, socially responsible family of mutual funds designed to help people and groups integrate their finances with faith values. Everence helps individuals, organizations and congregations integrate finances with faith through a national team of advisors and representatives. Everence offers banking, insurance and financial services with community benefits and stewardship education. To learn more, visit Everence.com or call (800) 348-7468.
About Church Investors Group (CIG)
The Church Investors Group (CIG) has nearly 40 members with combined assets of c£12 billion. Investing bodies from the Church of England, Church in Wales, Methodist Church, Roman Catholic Church, United Reformed Church and the Joseph Rowntree Charitable Trust raised concerns with the BP Chairman in December. For further information, visit www.churchinvestorsgroup.org.uk.
Ceres is a national coalition of major investors, businesses and public interest organizations working with companies to address sustainability challenges such as climate change and water scarcity. Ceres directs the Investor Network on Climate Risk, a North American network of institutional investors focused on addressing the financial risks and investment opportunities posed by climate change. INCR currently has more than 95 members with collective assets totaling about $9.5 trillion.