BP defends climate strategy at AGM showdown

BP clashed with investors and activists at its annual meeting, arguing its strategy was aligned with the Paris climate accord despite slowing the pace at which it will cut oil and gas output this decade.

At the event, the opening minutes of which were interrupted by protesters, Chief Executive Bernard Looney argued that BP was supporting the goals of the Paris Agreement by investing in low-carbon forms of energy such as hydrogen and hydrogen. ‘wind, pushing for regulation to support green investments and reduce the group’s emissions.

“We absolutely believe overall we’re really compliant,” said Looney in response to questions from Follow This, an activist shareholder who has a record of proposing shareholder resolutions for fossil fuel makers to set more ambitious emissions reduction targets .

In February, BP resized its pledge to reduce oil and gas production by 40% by 2030 from 2019 levels and is now aiming for a 25% reduction. As a result, it now aims for a 20-30% reduction in “Scope 3” emissions by 2030, up from its previous target of a 35-40% reduction.

Scope 3 emissions are those resulting from consumers’ use of oil and gas, for heating, driving and flying, and make up the majority of an oil and gas company’s greenhouse gas impact.

Despite adjusting its target for Scope 3 emissions, often referred to as value chain emissions, BP has not voted shareholders on its net zero strategy, as it did last year. Rathbones, an asset management group and investor at BP, wondered why the company hadn’t offered investors a vote on the new targets.

Helge Lund, chairman of BP, told the meeting that following “extensive engagement” with investors before and after the February decision, BP identified “little appetite” for a new vote on the strategy. “Our strategy doesn’t change, our destination is unchanged,” he said.

Follow This said the pledges, while more ambitious than many BP colleagues, were not enough to meet the goals of the Paris Agreement, which UN scientists say calls for a 45% reduction in global emissions by 2030.

Interim results of the meeting vote indicated that 17% of shareholders supported the Follow This resolution for greater strategic alignment with the Paris Agreement, up from 15% last year but down from 21%. in 2021.

“It’s still a signal,” Mark van Baal, the founder of Follow This, said after the meeting. “We thank these investors for their determination to achieve the Paris goal.”

Several UK pension schemes he had promised to vote against the re-election of BP chairman Helge Lund in response to weakened emissions targets, but about 90% supported his reappointment. This was down from 97% in 2022.

Looney said he was “delighted” with the level of shareholder support. “What we have clearly heard from our shareholders is that they want us to continue the work of delivering on the transformational strategy that we have set out.”