BP faces shareholder rebellion over weakened climate targets

BP revealed in February that it would no longer aim to reduce oil and gas production by 40% between 2020 and 2030, partly due to the increased profitability of the fuels.

The original aim had underpinned a commitment to reduce upstream emissions by 35-40% within the decade.  Now, BP is anticipating a reduction of 20-30%.

Activist group Follow This filed a shareholder resolution calling on BP to not only reinstate its original targets, but produce more detailed information on how, exactly, its plans align with the Paris Agreement.

Almost 17% of votes at the AGM were cast in favour of the resolution, despite BP urging voters to oppose it. Shareholders do not publicly need to disclose their positions, but five pension funds, including Nest, have announced that they supported Follow This.

“Not only were we disappointed to see the company going back on the targets, but we were also really surprised not to have had any consultation,” Nest’s senior responsible investment manager Katharina Lindmeier told the BBC. Nest was one of the first British pension schemes of its size to set a net-zero financed emissions target.

BP chair Helge Lund said the resolution was “unclear” and argued that the firm “absolutely believes” its strategy is “coherent” and “consistent with Paris”.

While the resolution did not pass, Follow This’s founder Mark van Baal said the vote should send a “strong signal” to BP and other firms in the energy sector.

Make My Money Matter’s chief executive Tony Burdon said: “With critical votes at other oil and gas majors such as Shell upcoming, we hope UK pension funds listen to the science – and their members – and vote against any director who continues to pursue reckless fossil fuel expansion.”

A dramatic meeting

Shareholders were not the only rebels in the room at the BP AGM. Several climate activists attended and repeatedly interrupted senior company officials, calling them “climate criminals”.

Also present was the family of Ali Hussein Julood, the subject of the recent ‘Under Posioned Skies’ documentary. The documentary exposed undeclared gas flaring at fields in Iraq, managed by BP and Eni. Julood believed the flaring caused his leukaemia. He passed away earlier this month.

BP chief executive Bernard Looney aid: “We are continuing to reduce flaring at Rumaila. We are making progress and it must continue to be made”.

Looney himself was the subject of another shareholder rebellion.18% of votes were cast against BP’s renumeration package, with a particular focus on Looney’s £10m pay package, which doubled year-on-year.  Last year, less than 6% of votes were against BP’s approach to pay for its directors.