BP shareholders’ vote to increase shift from fossil fuel reaches 20%

Afresh example of the pressure mounting on oil and gas firms to speed up their transitions away from fossil fuels was served up by investors at BP’s annual general meeting.

More than a fifth (20.65%) of votes cast at the AGM went in favour of a resolution tabled by activist shareholder group Follow This, despite advice from BP’s board to vote against it.

It meant the climate resolution was rejected but it received significantly more support than the last resolution Follow This filed two years ago, which only got 8.4% of votes.

Mark van Baal, who founded the group, said the outcome showed investors increasingly understood the need for immediate emissions cuts.

BP acknowledged the poll result and vowed to engage with shareholders on its strategy to make sure their views are “fully understood”.

Before the AGM, Follow This said it wanted BP to set targets “consistent” with the Paris Climate Agreement goal of keeping global warming below 2 degrees Celsius compared with pre-industrial levels.

The resolution demanded targets covering the short, medium and long-term greenhouse gas emissions of BP’s operations and the use of its energy products.

London-headquartered BP had argued the resolution would mean going back to the drawing board on its plans, which would “compromise” the company.

Yesterday, chairman Helge Lund said he was “confident” BP’s strategy was in line with Paris and “pleased” with the progress to transform the firm into a broad energy company.

In the last year, BP has vowed to cut its oil and gas production by 40% by 2030 and pledged to invest 10 times more in low-carbon technologies like hydrogen and carbon capture.

The firm has entered the UK and US offshore wind markets and outlined plans to develop Britain’s largest blue hydrogen production facility on Teesside.

This week, BP confirmed it would participate in the ScotWind offshore leasing round.

During the AGM, chief executive Bernard Looney agreed BP had made a “strong start” to executing its strategy.

He also claimed the support BP is providing to people leaving the company could be taken as a sign of its commitment to a “just transition”.

Referring to job cuts announced in June 2020, he said: “We have close to 10,000 people leaving the company during our current restructuring. It’s not a ‘just transition’, per se, but it could be viewed as such, in some ways.

“We’re providing people who are leaving with more resources, support and help than we have done in the past to try to help them prepare for the next phase of their careers, which may well be in a very different industry.”

Mr Looney pointed out existing employees were transferring from oil and gas to renewable energy operations within BP.

The Irishman, who used to lead the company’s Aberdeen-headquartered North Sea business, said the company was also assisting cities with the transition.

In September, it announced a pact to become the planning and technical adviser for the Granite City’s 2045 netzero “vision”.

Mr Looney yesterday described Aberdeen as an “oil and gas city” which now has a clear lowcarbon ambition.

UNDER PRESSURE: Executives of the oil and gas giant said yesterday they were satisfied the company is on target to meet the demands of the Paris Climate Agreement.