BP defends climate strategy at AGM clash

BP went head to head with investors and campaigners at its annual meeting, claiming that its strategy was aligned with the Paris climate agreement despite having slowed the pace at which it will reduce oil and gas output this decade.

At the event, whose opening minutes were disrupted by protesters, chief executive Bernard Looney argued that BP was supporting the objectives of the Paris accord by investing in lower-carbon forms of energy such as hydrogen and wind, pushing for regulation to support support green investment and reducing the group’s emissions.

“We absolutely believe that in totality we are indeed compliant,” Looney said in response to questions from Follow This, an activist shareholder that has a record of proposing shareholder resolutions for fossil fuel producers to set more ambitious emissions reductions targets.

In February, BP scaled back its commitment to cut oil and gas output by 40 per cent by 2030 compared with 2019 levels and is now targeting a 25 per cent reduction. As a result, it is now aiming for a fall of 20 and 30 per cent in “scope 3” emissions by 2030, compared with its previous goal of a 35 to 40 per cent fall.

Scope 3 emissions are those from the use of oil and gas by consumers, in heating, driving and flying, and make up the bulk 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 did not ballot shareholders on its net zero strategy, as it had done last year. Rathbones, a wealth management group and BP investor, questioned why the company had not offered investors a vote on the new targets.

Helge Lund, BP chair, told the meeting that following “extensive engagement” with investors before and after the February decision, BP had identified “little appetite” for a new vote on the strategy. “Our strategy is not changing, our destination is unchanged,” he said.

Follow This said the commitments, while more ambitious than many of BP’s peers, were not enough to meet the goals of the Paris accord, which UN scientists say require a 45 per cent cut in global emissions by 2030.

Provisional voting results from the meeting indicated that 17 per cent of shareholders backed the Follow This resolution for greater strategic alignment with the Paris agreement — up from 15 per cent last year but down from as high as 21 per cent in 2021.

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

Several UK pension schemes had promised to vote against the re-election of BP chair Helge Lund as a response to the weakened emissions targets, but some 90 per cent backed his reappointment. This was down from 97 per cent in 2022.

Looney said he was “delighted” with the level of support from shareholders. “What we’ve heard clearly from our shareholders is that they want us to get on with the job of delivering the transformation strategy we have laid out.”