Concerns are mounting over the effect of BP's oil leak in the Gulf of Mexico on UK pension funds, since their portfolios typically have large holdings in BP.

FairPensions has dug deeper and raised further evidence of concerns about BP's long-term risk management, gaps in investor scrutiny, and low-cost solutions.

At BP's AGM debate on the FairPensions-coordinated resolution on the risks that were associated with the company's planned Canadian 'tar sands' projects, Carl-Henric Svanberg, BP chairman, responded to investor doubts about the company's future oil demand assumptions and cited the International Energy Agency's (IEA) 'reference scenario' as evidence of projected oil demand growth to 2030.

However, this scenario, as pointed out by the IEA, 'assumes no change in government policies, [would have] profound implications for environmental protection, energy security and economic development, [and] would entail an eventual global average temperature increase of up to 6 degrees C.'

Investors should act as responsible owners, says FairPensions, monitoring and managing environmental, social and corporate governance risks that could create long-term financial problems. This has been underlined by the crisis and by the latest in a list of what FairPensions says are "avoidable" BP crises.

Research by the campaign group on pension funds and fund managers consistently shows that recognition of the financial risks of 'extra-financial issues' is not usually matched by practice for pension funds and their managers.

"From oil leaks to irresponsible lending, environmental, social and corporate governance issues have a history of precipitating crises which damage our economy and our investments," commented director of campaigns, Duncan Exley. "We urge investors - or the government if necessary - to put in place measures to ensure that these issues are monitored and managed so that the next crisis is less likely to affect us all."

The BP press office was unavailable for comment on the claims at the time of going to press.

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