Activist Actions24 Apr 2023 14:43
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MONDAY 24 APRIL 2023 11:13 AM
BP: Activist investor urges toughening up of climate agenda – as pressure builds on energy giant’s chair
BY:NICHOLAS EARL
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.
Hedge Lund
Mark van Baal, founder of Follow This, told City A.M. 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
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