Shareholder and Investor engagement

Increasing investment by oil companies in unconventional oil, such as Canadian tar sands and US shale oil, risks dangerous levels of climate change and local ecological disaster. It also poses a major financial risk to banks, pension funds and other investors. The Co-operative Bank, Insurance and Investments is therefore engaging directly with both the oil companies themselves and other investors to highlight the risks involved in exploiting these Toxic Fuels and request that companies reduce social and environmental impacts.

• United Nations Principles for Responsible Investment (UNPRI)
• Unconventional Oil: scraping the bottom of the barrel?
• Institutional investor event
• BP and Shell: rising risks in tar sands investment’ – Report and engagement

United Nations Principles for Responsible Investment (UN-PRI) investor letter

In July 2009 The Co-operative Asset Management organised a letter to oil companies involved in extracting the tar sands of Alberta, Canada. Facilitated by the UN-PRI and endorsed by over 40 major European and North American institutional investors, representing over US$3 trillion of assets, the letter asked companies to provide greater disclosure on how they are dealing with social, environmental and regulatory risk in tar sands, and to meet good standards of environmental management and social responsibility. The signatory investors are now assessing oil company responses before deciding upon the next course of action.

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'Unconventional Oil: scraping the bottom of the barrel?' report and engagement

In July 2008, The Co-operative Bank, Insurance and Investments, and WWF-UK jointly published the report 'Unconventional Oil: scraping the bottom of the barrel?' examining the social, environmental and financial risks associated with unconventional oil. The report recommended oil companies report on the environmental and social risks associated with their unconventional oil operations, including carbon emissions, boreal forest and local community impacts, water intensity and long-term toxic waste management, and publicly disclose strategies for mitigating these risks.
The Co-operative Investments engaged extensively with BP and Shell on the issue, sending copies of the report to both companies and meeting the companies to discuss the findings.

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Institutional investor event

In September 2008, The Co-operative Bank, Insurance and Investments, presented the report to 60 attendees from over 20 institutions at an investor event organised by the UK Social Investment Forum and The Co-operative Asset Management. WWF-Canada and the Tyndall Centre for Climate Change Research also addressed the investors regarding the local environmental and potential climate change implications of unconventional oils. The event sought to form an investor coalition to collectively engage with oil companies on this issue.

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‘BP and Shell: rising risks in tar sands investment’ report and engagement

In late 2008, representatives of The Co-operative Asset Management and
The Co-operative both signed a covering letter sent to pension funds together with the Greenpeace/Platform report ‘BP and Shell: rising risks in tar sands investments’, recommending investors seek greater disclosure from the two companies on the risks associated with tar sands.

Shareholder engagement will continue throughout 2009, this page will be updated regularly with progress reports.

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