BP is facing growing investor pressure over its climate change commitments after a fifth of the company’s shareholders voted in favour of a resolution from an environmental activist group demanding tougher emission reduction targets.
While 79 per cent of investors at the energy major's annual meeting voted against the proposed resolution by shareholder group Follow This, which demands oil companies reduce their emissions, 20.6 per cent voted in favour of the plan. This was significantly higher than the 8.4 per cent support gained in the last climate resolution it filed at BP's AGM in 2019.
Follow This said BP’s targets, which aim to reduce greenhouse gas emissions from its oil and gas production to zero and halve the carbon intensity of its products by 2030, were not consistent with the 2015 Paris climate change agreement.
“Once again, responsible investors have given a clear signal to the board of BP,” said Mark van Baal, the head of Follow This who tabled the climate resolution.
“They’re saying ‘we do not accept empty promises for the distant future any more, we need you to act now’. Saying that you’re Paris-aligned isn’t enough to appease investors any more.”
The group demanded BP publishes short, medium and long-term targets to reduce emissions consistent with the Paris agreement to limit global warming to below 2°C from pre-industrial levels.
BP said it would continue to engage with shareholders on its strategy, targets and aims “to ensure their views are fully understood”.
Mr van Baal said "a fifth of shareholders want BP to go back to the drawing board and rethink their strategy”. However, Follow This was unable to convince enough shareholders to back its resolution.
The energy system needs to be rewired. So we're in action, aiming for a 35-40% reduction by 2030 in the emissions associated with carbon in our upstream oil & gas production - just one step we’re taking to deliver our #bpNetZero ambition
— bp (@bp_plc) April 23, 2021
Much of the disagreement centred on how businesses work out whether they are sticking to Paris targets.
BP’s chief executive Bernard Looney said at the AGM there was “no single path to Paris” and “no single metric that can measure Paris consistency”.
“This is exactly what shareholders request of BP by voting in favour of resolution 13 – BP should go back to the drawing board and disrupt its current business plans, which involve an increase in emissions, in order to protect investors’ assets from climate change,” Follow This said.
BP also plans to slash its oil output by 40 per cent and boost its renewable power business twentyfold by 2030.
The company said it would publish an update on its engagement with shareholders regarding climate within six months.
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