BP Shareholders Retreating From Paris Alignment, Follow This Says

BP Shareholders Retreating From Paris Alignment, Follow This Says
Follow This stated that the fight against the climate crisis lost some of its momentum at BP with support for Paris climate targets dropping to 15 pct, down from 21 pct in 2021.

Environmentalist stakeholder in Big Oil firms Follow This stated that the fight against the climate crisis lost some of its momentum at BP with support for Paris-consistent climate targets dropping to 15 percent, down from 21 percent in 2021.

“BP may have convinced investors that addressing the current energy shortage overrides addressing climate change,” said Mark van Baal, founder of Follow This, the organization that filed the climate resolution.

“Neither our climate resolution nor BP’s strategy has changed; their current strategy still does not lead to emission reductions by 2030. However, investor sentiment has changed, likely because of the energy crisis and windfall profits brought on by the war in Ukraine.

“Investors’ short-termism, fueled by the current windfall profits of BP, might have prevailed over the medium-term risk of value destruction caused by the climate crisis. Both crises can and should be dealt with simultaneously by shifting investments to renewables; the current windfall profits provide the company with the necessary capital to make the enormous investments in the energy transition required to address the climate.

“Today’s voting results are a loss in the fight against the climate crisis. Today, everybody loses, except the board of BP. They could interpret the decrease in investor support as a mandate to stick with its business model for another year, a business model that exacerbates the climate crisis.

“The 15 percent of shareholders that voted in favor of the climate resolutions show that a significant number of investors still want to see Paris-aligned emission targets. Now is the time to amplify the voice of these investors who take the long-term interest of BP and its shareholders into consideration,” van Baal stated.

During the AGM, the question, Jesper Vaarwerk of Follow This asked BP’s CEO Bernard Looney if absolute emissions will decrease by 2030, which is necessary to achieve the Paris Agreement goals. Looney did not answer the question.

Follow This suspects that BlackRock, which held almost an 8 percent stake in the company in 2021 and voted in favor of the environmental group’s climate resolution in 2021, might have shifted their vote from ‘for’ in 2021 to ‘against’ in 2022.

“We recognize that 15 percent of the shareholder votes is still significant, and we thank these shareholders for their efforts to safeguard the climate. Together with them, we will remind fellow shareholders what’s at stake. We hope we can convince them before the AGMs of Shell, Exxon, and Chevron, happening in two weeks. At BP, another year of IPCC’s ‘rapidly closing window’ to address the climate crisis is lost,” van Baal said.

The confusion created by in-house resolution

BP’s in-house climate resolution received 88.5 percent. Both voting results contrast with the other 22 resolutions where up to 99 percent of shareholders followed management voting advice. According to Follow This, it is a signal of discontent with BP’s current strategy.

In-house resolutions only create confusion as seen with Shell last year. At Shell, in 2021, 89 percent voted for the in-house resolution and 30 percent for the Follow This resolution.

“Does a vote against an in-house resolution mean that investors want more climate action, less climate action, or no climate action at all? Does a vote in favor of an in-house resolution mean that investors are satisfied with the current inadequate targets or that they want more?” Follow This asked but provided no answer.

It is worth noting that a group of shareholders has voted for both resolutions to encourage BP to advance its targets but Follow This pointed out that the only climate resolutions which bring clarity are shareholder resolutions that ask for Paris-aligned targets.

“We have lost a precious year in the fight against climate change at BP; a year in which the company will continue to increase emissions, with the consent of its shareholders. We have not succeeded in convincing investors of the devastating financial consequences of their votes against the Paris alignment.

Together with like-minded investors and partners, we will amplify our message that only voting will change Big Oil. We thank the investors who voted for the Follow This climate resolution and against BP’s in-house resolution. They are the true change agents in the fossil fuel industry; an industry that has proven to be change-averse,” van Baal added.

To contact the author, email bojan.lepic@rigzone.com


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