BP faces shareholder challenge over carbon targets
BP, Chevron and ExxonMobil face a shareholder challenge to set carbon targets in line with the Paris climate agreement, as a green group seeks to repeat its success in pressuring Shell to set environmental benchmarks.
When Shell’s chief executive, Ben van Beurden, laid out an ambitious long-term carbon target last year, he acknowledged the role played by a resolution on carbon targets submitted by Dutch activist shareholders Follow This.
Follow This is hoping to use investor power to push other major oil and gas firms into setting similar goals.
The organisation has bought shares in several major fossil fuel groups and has submitted two resolutions to the European firms BP and Shell. It will file identical resolutions with the US companies Chevron and ExxonMobil later this week if other parties do not submit a similar demand.
Investors at the firms’ annual general meetings next year will be asked to vote in favour of them publishing climate change targets in alignment with the international goal of keeping the rise in global temperatures well below 2C.
Mark van Baal, the founder of Follow This, said: “Targets should be on the agenda of every oil company, given that the oil industry can make or break the Paris climate agreement.”
The group has little chance of winning by persuading a majority of the four companies’ shareholders to back the resolution but it believes the tactic can put public and investor pressure on firms.
Although backed by the Church of England and major pension funds, the resolution filed for Shell’s AGM on carbon targets failed in 2017, with 94% of shareholders voting against and 5% abstaining.
When Van Beurden set the firm’s carbon goals last year, however, he said the firm had seen a kernel of truth in the proposal.
Van Baal said: “We expect that the investors who supported the Shell resolution will also support the resolution with the other companies and that more investors will start to participate.”
The resolutions will ask firms to set goals that account for their biggest contribution to global warming – the emissions produced when consumers burn the oil, which are known as scope 3 emissions. That is considered an important step beyond oil companies just cutting emissions from their own operations.
For BP that would mark a significant step up from the carbon curbs its chief executive, Bob Dudley, announced earlier this year, which explicitly ruled out counting emissions from the burning of its products.