BP: Activist investor urges toughening up of climate agenda – as pressure builds on energy giant’s chair
Activist investor group ‘Follow This’ has urged shareholders to back proposals to toughen BP’s climate agenda.
The call comes amid intense pressure on its chairman Helge Lund, after the energy giant watered down its emission targets earlier this year.
BP faces the growing prospect its chairman could be ousted by shareholders at a crunch AGM vote this week, with five of the UK’s biggest pension schemes set to vote against Lund’s re-election.
The energy giant has eased its pledges to cut emissions, targeting a 20-30 per cent cut by the end of this decade – compared to a previous plan fora 35-40 per cent reduction over the same time period.
It also plans greater production of oil and gas over the next seven years compared with previous targets.
Mark van Baal, founder of Follow This, told Morning Wire he hoped the momentum against its chairman could be used to challenge the BP wider energy ambitions.
Follow This has tabled its own proposal – resolution 25 – calling for the company to include scope three emissions in its existing 2030 reductions.
This is to ensure BP’s energy agenda is in line with the Paris Climate Agreement, including the target of limiting global warming to below two degrees Celsius above pre-industrial levels.
He said: “Pre-declarations against the chairman would logically be coupled with a vote in favour of Resolution 25, which requests that BP aligns its targets with the Paris Agreement.
“We suppose that these investors also vote in favour climate resolution 25, the most effective tool to urge BP to drive down emissions by 2030. We hear that investors have concerns about governance as well as overall climate change goals at BP.”
Scope three emissions encompass those not just produced by the company itself, but those it’s indirectly responsible for, up and down its value chain.
This includes its customers, and the emissions they produce when they burn purchased oil for energy consumption.
The issue is contentious among oil and gas companies across the industry, with fossil fuel majors refusing to commit to absolute targets with scope three – arguing they are too difficult to forecast
BP has urged shareholders to vote against resolution 25, considering it “unclear,” “simplistic” and “disruptive,” while encroaching on the board’s accountability to set the company’s strategy.
Major investor advisers ISS and Glass Lewis have also both told BP shareholders to oppose Follow This’ resolution.
While BP is widely predicted to hold off investor pressure over scope three emissions, as it has done for the previous four years in shareholder votes – the challenge facing Lund is less expected.
Lund has chaired BP since 2019 and was backed by 96.6 per cent of shareholders at last year’s annual meeting.
At last year’s annual meeting, 88 per cent of investors supported its climate plans.
However, Universities Superannuation Scheme has joined forces with the National Employment Savings Trust in announcing plans to vote against Lund, as first reported by The Times.
Brunel Pension Partnership, a group of nine council schemes, also revealed it would vote to remove him, alongside two other pension umbrella groups, LGPS Central and Border to Coast.
BP has been approached for comment.