SOURCE: MMA Praxis

May 17, 2010 11:15 ET

Investors Pressure Shell for Greater Disclosure on Canadian Oil Sands Risk at Its May 18th General Meeting

BP Gulf Spill Raises Concerns About Potential Negative Financial, Environmental and Social Risks of Unconventional Oil Extraction Strategies

GOSHEN, IN--(Marketwire - May 17, 2010) -  MMA Praxis Mutual Funds -- the only U.S. filer of a U.K. shareholder resolution at Royal Dutch Shell on Oil Sands risk disclosure -- and Boston Common Asset Management today released a letter from U.S. investors underscoring the importance of transparency on environmental and social issues related to unconventional oil extraction projects. A special resolution on oil sands is to be presented at this year's Annual General Meeting of the company on May 18, 2010. At BP's AG last month, 15 percent of shareholders refused to back company management's recommendation to vote against an identical resolution -- a significant result for a U.K. firm, where shareholder resolutions are much rarer.

Investors joined together to publicly support a vote in favor of the Canadian oil sands risk assessment resolution slated for Shell's meeting. Shell's recent announcement that it will slow development of its oil sands properties going forward came along with statements from the company that oil sands will remain a significant area of investment. Past investor presentations have stated that the oil sands represent nearly one third of Shell's total global resources, providing investors with significant reason to be concerned. These concerns have been heightened with the rapidly expanding oil spill in the Gulf of Mexico.

"The current Gulf oil spill shows that both deep-water, offshore drilling and the oil sands are products of a push into the margins of oil/gas extraction where technology is unproven, regulation is uncertain, experience is limited, environmental clean-up costs are high and the financial/social/environmental risks of a mistake -- just one -- can be catastrophic," said Mark Regier, Director of Stewardship Investing, MMA Praxis Mutual Funds. "These aren't the traditional Texas oil wells of days gone by. Such unconventional extraction strategies involve risks we are only now beginning to truly understand. This is why a clear, honest assessment of costs and potential negative impact -- which we are calling for in the resolution -- is so critical."

Lauren Compere, Managing Director, Boston Common Asset Management, said, "Given the complexities of U.K. filing requirements only a small portion of concerned investors are able to co-file such a resolution. In addition, those investing through popular ADRs, (American depository receipts, traded on U.S. stock exchanges), do not have votes counted at all. We feel that this letter is needed to allow non-U.K. investors a voice with Shell. As long term investors, we want to ensure that Shell's portfolio projects remain robust against a range of environmental, market and regulatory scenarios." 

A number of U.N. Principles for Responsible Investment signatories joined together to publicly support a vote in favor of the oil sands resolution at both BP and Shell. These investors included Boston Common Asset Management, Co-Operative Asset Management, Ethos Foundation, Green Century Capital Management, SNS Asset Management, Trillium Asset Management, Unison Staff Pension Scheme and Walden Asset Management.

The support statement highlights that: "There are grounds to believe that these risks are potentially material to BP and Shell, but neither company has given a consistent account of how their oil sands investments square with their respective views on the preferred transition to a lower-carbon energy economy nor have they adequately disclosed to investors how they plan to manage regulatory and physical risks over the long-term."

Louise Rouse, Director of Investment Engagement at FairPensions, who coordinated the resolution filings at both BP and Shell, said, "Investors and independent analysts have raised doubts about the high costs of extracting and converting oil sands to fuel, the risks to future profitability presented by rising carbon emissions costs, oil price fluctuations and legal and reputational risks arising from environmental damage and impairment to front-line indigenous communities. Although Shell has made welcome disclosures to its current oil sands operations, investors remain in the dark about profitability and risk management of planned 'in-situ' projects, which have higher production costs and greenhouse gas emissions, and make up the bulk of Shell's oil sands assets."

About Boston Common Asset Management
Boston Common is an employee-owned investment firm dedicated to the pursuit of financial return and social change. Boston Common works to advance our clients' missions globally through independent ESG research and shareholder engagement. As of March 31, 2010, Boston Common managed $1.2 billion in assets, included subadvised accounts.

About FairPensions
FairPensions campaigns for pension funds and fund managers to adopt responsible investment practices, managing environmental, social and governance (ESG) issues which have the potential to be financially relevant. Copies of the shareholder resolutions are available at http://www.fairpensions.org.uk/tarsands/resolutions

About MMA Praxis Mutual Funds
MMA Praxis Mutual Funds is a faith-based, socially responsible family of mutual funds designed to help people and groups integrate their finances with faith values. MMA provides a wide range of insurance and financial services. Rooted in the Anabaptist faith tradition, MMA also offers practical stewardship education and tools to individuals, congregations, organizations, and businesses.

You should consider the fund's investment objectives, risks and charges and expenses carefully before you invest. The fund's prospectus contains this and other information. Call (800) 977-2947 or visit www.mmapraxis.com for a prospectus, which you should read carefully before you invest. MMA Praxis Mutual Funds are distributed through BHIL Distributors Inc. Member FINRA. Investment products offered are not FDIC insured, may lose value, and have no bank guarantee.

MMA Praxis International Fund held the following percentage of the mentioned companies as of March 31, 2010: Royal Dutch Shell (1.26 percent), BP (1.9 percent). MMA Praxis Intermediate Income Fund held the following percentage of the mentioned companies as of March 31, 2010: Royal Dutch Shell (0.4 percent), BP (0.59 percent). Fund holdings are subject to change. To obtain holdings as of the most previous quarter please visit mma-online.org. 

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