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Apr 28, 2023

BP shareholders vote against activist climate proposal

Shareholders voted 84 percent against Follow This’s ESG resolution

Shareholders at energy conglomerate BP have voted against aligning the company’s ESG strategies with the Paris Climate Agreement.

At yesterday’s AGM, shareholders voted 84 percent against green activist Follow This’s climate resolution which would see the company focus its ESG efforts on limiting global warming to 1.5°C.

However, 17 percent of shareholders voted in favor of the resolution, which was more than last year’s results of 15 percent in favor.

At the beginning of the meeting, BP chair Helge Lund said resolution 25 represents the fourth time in five years that Follow This has tabled such resolutions with BP.

‘It is a resolution that shareholders have consistently rejected in the past – and we ask shareholders to reject the resolution today.

‘The board does not support this resolution and recommends voting against it. I don’t doubt the good intentions of Follow This and their supporters. We share their desire for the world to meet the Paris goals. But this resolution is not the answer.’ 

During the Q&A portion of the meeting, the BP board faced off with shareholders and were pressed to answer questions about the company’s change in stance towards its ESG strategy.

BP shareholders vote against activist climate proposal
Helge Lund, BP

In February BP said it would reduce its ESG targets after raking in the highest profits in the company’s 114-year history. The $121 bn energy conglomerate saw profits reach $27.6 bn in 2022, up from $12.8 bn the previous year, reflecting the impact price increases have had on the energy sector.

In 2019, BP committed to reducing its oil and gas production by 40 percent by 2030 but this new strategic move will see the company lower its expectation to a target of around 25 percent.

Reduce absolute emissions

One investor asked why the BP board was urging shareholders to vote against the resolution on climate change and said he expected the company to be ‘more aware, open-minded and progressive’.

In response, Lund said: ‘We believe this resolution, as I've said in my opening remarks, is disrupting BPs coherent and integrated program of transformation as a totality.

‘We agree with you that the word needs to reduce absolute emissions and transition away from oil and gas, that's the basis of our strategy.’

He added: ‘That's why our ambition has two parts to get BP to net zero and to help the world get to net zero too. I think it's fair to say that we are in action on both parts and since we set our ambition, we have made some very significant progress.’

Concerned shareholder

Katharina Lindmeier, senior responsible investment manager at pension fund Nest, which is also a shareholder, explained, BP’s decision to weaken its climate targets within a year of setting them, without consulting shareholders, ‘really concerns us’.

‘We’re used to seeing companies strengthen climate targets, not water them down.

‘On the back of this AGM we’ll continue to engage with BP, outlining our concerns and encouraging them towards sustainable business decisions. We want BP to manage climate change risk and invest in the transition so it can remain a profitable business for our members over the coming decades.’