Proposal Exclusion Escalation: BP Issued “Legal Ultimatum” Over Rejected Resolution
27 March 2026
Follow This has escalated its dispute with BP by issuing a legal ultimatum after the company refused to circulate a climate‑related shareholder resolution ahead of its 2026 AGM. The case raises key questions shareholder democracy and UK corporate governance, as well as holding major implications for investors.
A letter sent by a legal firm on behalf of Follow This gives BP until 1 April to amend its AGM notice to include the proposal ahead of the 23 April meeting. Follow This had warned that it may take legal action if BP maintains the exclusion, but no formal legal challenge has yet been lodged.
Proposal Pushback
The proposal, filed in January and supported by 16 major institutional investors, asks BP to explain how it would protect shareholder value under a scenario of long‑term oil and gas demand decline. BP initially confirmed that the threshold for submission had been met, before reversing course and arguing that the wording is not consistent with the Companies Act or its Articles of Association, according to Follow This.
“BP would rather go to court than answer a question. Every shareholder should be asking why,” said Mark van Baal, CEO of Follow This. “This case is bigger than one resolution at one company. Shareholder democracy in the UK is at stake. If BP can block a valid resolution without explanation, any company can. We will not let that stand.”
As reported by IPE, Sarah Wilson, CEO of Minerva Analytics, criticised BP’s lack of transparency, saying, “They should have just been transparent. What is the problem with explaining?” and warning that “They have just shot themselves in the foot. The automatic putting up of the shutters is going to make more of an issue, not less,” arguing that this failure undermines the UK Corporate Governance Code’s ‘comply or explain’ principle.
Limited Exclusion Precedents
Follow This notes that it is not aware of other recent FTSE 100 examples where an otherwise eligible resolution has been rejected. It pointed to comments from LSE Law School’s Suren Gomtsyan, who reportedly said he had “never heard of a previous case where a FTSE 100 company rejected a shareholder resolution proposal”. Shell will put a proposal described by Follow This as “almost identical” to shareholders at its 2026 AGM, while BP shareholders will vote on a separate Australasian Centre for Corporate Responsibility resolution asking the company to report on capital expenditure for material oil and gas projects.
Instances of comparable exclusions in the UK are limited. A decade ago, National Express faced criticism for withholding a labour‑rights proposal from its 2016 AGM agenda despite strong support the previous year, prompting investor concerns around transparency and consistency in eligibility decisions.
BP Backdrop
The escalation comes amid ongoing investor scrutiny of BP’s climate‑strategy governance. At the 2025 AGM, nearly a quarter of shareholders voted against the former Chair after the board declined to offer a vote on its revised transition plan. BP had also excluded a vote on changes to its climate strategy that year. With a new Chair in place for the 2026 season, BP’s handling of the Follow This proposal is likely to be viewed as an indicator of how the board intends to approach climate oversight, shareholder dialogue and transparency around strategic disclosures.
BP’s rationale for excluding the Follow This proposal has drawn particular interest because of the company’s decision to allow a vote on the ACCR resolution. The difference suggests a more restrictive interpretation of the Follow This wording, prompting investors to question whether BP is applying its Articles consistently across similar climate‑related requests. How the company distinguishes the two proposals will be important for investor confidence in BP’s stewardship approach.
International Spillover and Regulatory Context
The situation unfolds against a backdrop of uncertainty in the US, where the Securities and Exchange Commission’s overhaul of the ‘no action’ request process for the 2026 proxy season has disrupted established practices. The changes have made it easier for companies to exclude proposals while simultaneously increasing legal risk, leading some firms to reverse exclusions under pressure from shareholders and others to include proposals to avoid litigation.
While the regulatory environment is jurisdiction‑specific, these developments illustrate how shifts in eligibility frameworks can influence issuer behaviour. Investors are watching to see whether UK companies begin to adopt more assertive exclusion strategies, potentially fragmenting common expectations around global stewardship processes.
Investor Implications
The case highlights several considerations for investors navigating the 2026 proxy season:
- Scrutiny of exclusions: Investors may need to assess more closely how companies interpret statutory and constitutional criteria for proposal eligibility, particularly where peers are taking different approaches.
- Preparedness for escalation: Even without formal court action, the use of legal ultimatums signals that litigation‑adjacent strategies may become more common in disputes over shareholder rights.
- Governance signals at BP: Given last year’s voting backlash and board changes, BP’s response will shape future expectations of its transparency and openness to shareholder challenge on climate strategy.
- Fragmentation of practices: Divergence in exclusion approaches across markets may require more tailored engagement and voting strategies to maintain consistent stewardship standards.
Conclusion
The ultimatum issued to BP now serves as a test of how far UK companies believe they can extend their discretion over which shareholder proposals reach the ballot. BP’s response will influence expectations for the remainder of the 2026 AGM season, especially regarding transparency and consistency in eligibility decisions. Investors should monitor the company’s interpretation closely and consider escalating where exclusions appear insufficiently justified or inconsistently applied.
Last Updated: 27 March 2026