The Observer: Ethical funds dump Shell shares: “blue-chip City institutions have confirmed that they have ditched all their Shell shares”
Nick Mathiason and Oliver Morgan
Sunday June 27, 2004
Leading institutions are selling shares in Shell over concerns about the way the company deals with environmental issues associated with its activities in Africa, the United States and Sakhalin Island off the Russian coast.
As the oil giant braces itself for a stormy annual general meeting tomorrow, two leading fund managers representing blue-chip City institutions have confirmed that they have ditched all their Shell shares.
Socially responsible investment (SRI) funds belonging to Investec Henderson Crosthwaite and Morley Fund Management have sold all Shell shares in recent months. The move is significant, because SRI decisions increasingly affect mainstream analysts' investment recommendations.
Their decision is a severe blow to Shell as it attempts to head off a revolt by investors at tomorrow's AGM. Resolutions to 'discharge directors of their responsibilities' for the past year - during which the firm was hit by scandal over the recategorisation of 4.47 billion barrels of reserves - are expected to be opposed by 30 to 40 per cent of shareholders.
If passed, the resolutions would effectively give directors on the Royal Dutch supervisory and management boards - including company head Jeroen Van der Veer - a clean bill of health for the past year.
One investor said: 'With the Securities and Exchange Commission investigation over the reserves, people don't want to discharge them. You could see 40 per cent vote against, which would be very damaging for relations between the company and investors. We think they are likely not to put it to the vote.'