Shareholders double-down as BP pushes back on climate
March 17, 2023
Shareholder activist group Follow This has urged shareholders to rally behind climate-related resolutions this year after BP pushed back ahead of its annual meeting.
The oil giant has called for investors to reject a resolution introduced by Follow This at its AGM on 27 April. The resolution calls for BP to align its Scope 3 carbon emissions reduction plan with the Paris Climate Agreement.
“We trust that investors who hoped that voting was not necessary in 2022, now realise that voting is crucial to compel BP to align with Paris,” said Mark van Baal, founder of Follow This. “Paris-aligned voting has to regain momentum in 2023.”
He added that BP’s stance this year was a “wake-up call for institutional investors, asset managers and pension funds”.
BP chairman Helge Lund said the board felt the resolution was not “in the best interests of the company and its shareholders because it is unclear, it encroaches on the board’s accountability to set the company’s strategy, and it is simplistic and disruptive”.
However, Van Baal argued that “investors have much more to worry about than the return on capital of oil majors”.
“They have to worry about the returns of their entire portfolio in the global economy, and these are in great danger if the world fails to reach the goal of the Paris Accord,” he said. “As stewards of the global economy they realize that the only formal power they have as a shareholder is the power of the vote.”
According to the Financial Times, two of the UK’s biggest pension fund investors plan to vote against BP’s board in an effort to force the company to improve its carbon emissions reduction plans.
The £91bn Universities Superannuation Scheme (USS) and the £38bn Border to Coast Pensions Partnership are stepping up their efforts to influence the climate-related actions taken by oil companies and banks. It is unclear whether the organisations plan to support Follow This’ resolution.
Earlier this month, USS issued a statement explaining that it planned to “vote more personally” against directors when companies fail to disclose a climate transition plan. David Russell, head of responsible investment at USS, told the FT this approach was “more likely to drive change”.
Last month, the Border to Coast Pensions Partnership – which manages assets on behalf of 10 local authority pension funds – published its voting policy for 2023. This stated the organisation’s intention to vote against board chairs at companies identified as poor performers by the Transition Pathway Initiative and Climate Action 100+.
BP has long been the target of climate action by shareholder groups, with activists Share Action and Follow This being particularly vocal for some time.
Last Updated: 17 March 2023