BP faces shareholder revolt over its changes in strategies

BP, the energy giant, is facing a shareholder revolt today due to its decision to slow its energy transition. Activist investors have pledged to block the re-election of the company’s board of directors’ chief in response.

Numerous major UK pension funds have expressed their intention to oppose the renewal of Helge Lund’s mandate during the annual general meeting in London. Follow This, an activist shareholders’ group advocating for “Big Oil to go green,” has introduced a resolution demanding greater ambition in BP’s climate objectives.

In February, BP announced plans to increase profits between the present day and 2030 by investing more in both renewable energy and hydrocarbons, resulting in a slower transition. Last year, Greenpeace labelled BP as “the most ambitious” of the global majors, but they now criticize the company’s plan – accusing it of caving into investors and governments.

Five pension funds have announced their intention to vote against Lund’s re-election, according to British media reports. Among them is Nest, which is also supporting the Follow This resolution.

Nest stated that they have “serious concerns about BP reaching their net zero goal and the long-term success of the company” if the current path continues. They argue for further investment in low-carbon solutions and renewables, rather than new oil and gas sites.

Brunel, another pension fund, announced its intention to vote against Lund’s re-election due to concerns about BP’s strategic changes.

Follow This claims that “a net-zero by 2050 aim is insufficient without a Paris-aligned aim for 2030,” referring to the 2016 agreement to keep global warming below 2C if possible, and ideally at 1.5C above pre-industrial levels.

The BP board responded to the resolution, acknowledging that shareholders and other stakeholders might have differing views on the company’s decisions. They went further to assert that BP has already established a strategy, net-zero ambition and aims that the board believes are in line with the Paris goals.

Fossil Free London, an NGO, has vowed to disrupt the annual general meeting as a protest against the energy transition strategy. Friends of the Earth have called for increased taxation on the windfall profits of BP and other energy giants as a result of the energy price surge caused by the war in Ukraine. Such measures would help reduce skyrocketing household bills.