Call me a hard-hearted bastard, but I'm finding it difficult to summon up the sympathy demanded by the institutional investors now threatening to sue BP. They claim that the company inflated its share price by misrepresenting its safety record. I don't know whether this is true, but I do know that the investors did all they could not to find out. They have just been presented with the bill for the years they spent shouting down anyone who questioned the company.

They might not have been warned by BP, but they were warned repeatedly by environmental groups and ethical investment funds. Every year, at BP's annual general meetings, they were invited to ask the firm to provide more information about the environmental and social risks it was taking. Every year they voted instead for BP to keep them in the dark. While relying on this company for a disproportionate share of their income (BP pays 12% of all UK firms' dividends), they refused to hold it to account.

It's not as if the warning signs were hard to spot. One of them is splashed across the front page of BP's 2009 annual review: the title is "Operating at the energy frontiers". Like all multinational oil companies, BP has been shut out of the easy fields by the decline of its old reserves and the rising power of state-owned companies. So, to keep the money flowing, BP takes risks that other companies won't contemplate. "Risk," the review states, "remains a key issue for every business, but at BP it is fundamental to what we do. We operate at the frontiers of the energy industry, in an environment where attitude to risk is key … We continue to show our ability to take on and manage risk, doing the difficult things that others either can't do or choose not to do."

Among the risky situations that BP claimed to have mastered in the 2009 review was deepwater drilling: "We are exceptionally well-placed to sustain our success in the deepwater Gulf of Mexico over the long term." But the risk here was scarcely greater than on the other frontiers. It is now producing oil from the Rumaila field in Iraq, as a result of a contract agreed in controversial circumstances. It has recently started shipping liquefied natural gas out of the Tangguh project in West Papua. The licence was provided by the Indonesian government, which brutally annexed the country to which the gas belongs, and committed genocide there. If West Papua achieves independence, BP will have a lot of explaining to do.

It is pouring money into deepwater oil off the coast of Brazil, and ultra-deepwater drilling off the coast of Angola. Having previously refused to invest in Canadian tar sands on the grounds of ecological risk, in 2007 it reversed this position, plunging into the world's biggest environmental battleground. Its pipeline across Alaska keeps leaking oil into sensitive habitats. Its pipeline between Azerbaijan and Turkey was built with the help of land seizures and a contract that effectively grants BP executive power over the Turkish government. For how long will that be allowed to stand?

According to a response it sent to a group of ethical shareholders earlier this year, BP appears to have based its expectations of future earnings on unconstrained energy demand. The figures for world energy growth it cited come from the International Energy Agency's reference scenario, which the agency defines as "a baseline picture of how global energy markets would evolve if governments make no changes to their existing policies and measures". The IEA predicts that this unconstrained demand would lead to 6C of global warming. If governments do decide to take climate change seriously (and the Deepwater Horizon spill gives Barack Obama leverage on this issue that he didn't possess before), BP's expectations become as realistic as Gordon Brown's prediction of uninterrupted economic growth.

The question was not whether one of these risks would materialise, but which, and when. The question is unchanged. The next disaster will happen sooner or later – but whether it will take place in Angola or Alaska, or somewhere in between, is anyone's guess. What BP presents as brave and visionary looks to its victims like a brazen disregard of life and livelihoods. Its expectations of future profit were based on the assumption – which, until now, has proved relatively safe – that other people would pick up the bill.

In 2002, after one of its analysts conducted his own research into the safety risks BP was taking in Alaska, Henderson Global Investors dropped BP from its socially responsible investment funds (this raises the question of what it was doing there in the first place, but never mind). Henderson published its decision, and the result was a stampede out of BP stocks by … nobody. The other investment companies chose to ignore Henderson's warning and rely instead on the oil firm's assurances.

Far from viewing BP and the other oil companies as risky options, institutional investors have treated them as foundation stocks: boring, dependable investments. As James Marriott of the pressure group Platform points out, part of the reason is that they expected governments to step up and defend any oil company that got itself into trouble: even, if necessary, to go to war on its behalf. They were seldom disappointed – until now.

So whenever greens or ethical investors warned them about BP's cavalier behaviour, instead of thanking them, the big fund managers reacted with hostility. On 15 April, five days before the Deepwater Horizon failure, a group of investors led by Co-operative Asset Management tabled a resolution at BP's AGM requesting more disclosure of the risks it was running in its tar sands operations. It was one of the most successful ethical resolutions ever, but all that means is that funds holding 15% of the shares either supported it or abstained. The other 85% supported the company's right to keep bamboozling them.

As a report last year by FairPensions warned, pension funds typically delegate the responsibility for assessing environmental and social risk to fund managers. The fund managers are either unwilling or unable to discharge it, explaining that the pension funds don't press them.

FairPensions surveyed the UK's 30 leading occupational schemes, with dire results. Only five funds published their voting records; just six had signed up to the UN's Principles of Responsible Investment. Even funds representing workers at companies that trumpet their ethical credentials – Aviva, Marks & Spencer and the Co-operative Group – performed dismally. The universities' and BT pension funds did well. The coal pensions scheme and the IBM, Unilever, BAE and Lloyds TSB funds each scored nought out of 20 for responsible investment.

So it's not BP, or not BP alone, which has damaged the pensions of the millions of people whose retirement funds are invested in the company; it's the fund holders now attacking it for deploying the dangerous strategies they endorsed. They have chosen the wrong target: they should be suing themselves.