Shareholder activism at global energy companies

Shareholder activism at global energy companies

Is the passing of the BP AGM resolution an activist victory?

Original news

A coalition of major investors in BP plc (BP), known as the 'Aiming for A' coalition, requisitioned a special resolution to be voted on at the BP AGM held on Thursday 16 April 2015. The resolution received the support of the BP board of directors in advance of the AGM and was passed (with over 98% of votes cast in favour).

A similar resolution has also been proposed (by the same coalition of investors) for the AGM of Royal Dutch Shell plc (Shell), to be held on 19 May 2015.

Who are the 'Aiming for A' coalition and what are their aims?

The 'Aiming for A' coalition is a grouping of asset owners and mutual fund managers from both the UK and abroad and includes the £150bn Local Authority Pension Fund Forum and the largest members of the £15bn Church Investors Group, as well as various charitable foundations and individuals. The coalition came together in 2011/12. Its stated aim is to undertake in-depth engagement with the ten largest UK-listed extractives and utilities companies, with a particular focus on the companies' climate performance (including promoting climate change mitigation, adaptation and transparency). The coalition's name is a reference to the 'A' carbon performance band (based on the A to E performance measure assessed by CDP). By way of example, BP reached a 'B' performance band in 2014.In its statement in support of the BP AGM resolution, the coalition explains that the reasons for it coming together range from systematic risk management and a 'collective fiduciary duty to engage in economic transformation' through to 'amplifying longer-term investor voices and involving ultimate beneficiaries'.

What did the BP resolution propose?

The 'Aiming for A' coalition requisitioned the circulation of a special resolution pursuant to the provisions of the Companies Act 2006, s 338 (CA 2006). Members of a public company can force resolutions onto the agenda of an AGM using the CA 2006

requisitioning procedure outlined in s 338(1), which provides that:

'...members of a public company may require the company to give, to members of the company entitled to receive notice of the next annual general meeting, notice of a resolution which may be properly moved and is intended to be moved at that meeting.'

Pursuant to

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About the author:
Jenisa is Head of Market Tracker, a transaction analysis product that sits within Lexis®PSL Corporate. She has over 13 years of legal publishing experience, with a focus on researching and reporting on trends and developments in the corporate and commercial legal market. Previous roles include content developer for Lexis®PSL, Legal Podcaster at Informa, and Research Editor at Practical Law Company where she specialised in reporting on cross-border corporate and commercial developments from the firm’s New York office.