Press Release

Leading investors welcome BP backing of shareholder resolution on climate change


Leading investors welcome BP backing of shareholder resolution on climate change

Leading shareholders have proposed a resolution requesting that BP sets out its business strategy consistent with the goals of the Paris Agreement on climate change. BP’s board plans to support the resolution at their Annual General Meeting this year.

This resolution builds on collective engagement under the ‘Aiming for A’ initiative, when shareholders overwhelmingly passed a motion in 2015, requesting the company to improve corporate reporting and transparency on climate change-related risks and opportunities.

Since then, extensive engagement has been held with the company by a group of investors (1) as part of Climate Action 100+. Globally this involves over 300 investors with $32 trillion in assets, with investor engagement across Europe delivered with the support of the Institutional Investors Group on Climate Change (IIGCC). These investors have identified climate change as a significant risk which requires urgent action.

At this year’s AGM, expected in May, the resolution, supported by leading investors and developed through IIGCC’s corporate engagement group, would require BP to set out:

  • Its business strategy which it considers, in good faith, to be consistent with the goals of the Paris Agreement on climate change
  • How the company evaluates the consistency of each new material capital investment with the goals of the Paris Agreement
  • Related metrics and targets, consistent with the goals of the Paris Agreement, together with the anticipated levels of investment in oil and gas and other energy technologies; targets to promote operational greenhouse gas reductions; the estimated carbon intensity of energy products; and the linkage of its targets with executive remuneration.

The resolution itself and accompanying supporting statement from investors can be seen here. Subject to approval at its AGM, the responsibility will be on BP to provide additional corporate reporting for the year ending 2019 as directed by the resolution. While it will be for BP to set out the process and methodology, investors will be keen to ensure they are sufficiently robust and reliable.

Stephanie Pfeifer, a member of the global Climate Action 100+ steering committee and CEO, Institutional Investors Group on Climate Change (IIGCC), explains: “Investors are helping ensure climate change is firmly on the boardroom agenda, which is especially important for the oil and gas sector. It’s encouraging to see major companies such as BP moving in the right direction. Global carbon emissions need to be reduced urgently and investors expect other companies in the sector to follow suit.”

Bruce Duguid, Head of Stewardship and lead co-ordinator of the resolution, Hermes EOS, said: “Having a strategy and investment consistent with the Paris Goals is critical to securing a sustainable future. This is good news for both investors and the planet. The decision by the BP board to support the resolution shows that this is a priority for the company and builds on progress to date, such as setting best in class methane intensity targets.”

Sacha Sadan, Director of Corporate Governance, Legal and General Investment Management went on to confirm his support saying: “Climate change is a serious issue that urgently needs collective action. This is a great example of investors and BP committing to the goal of building a low carbon future.” 

– Ends –

1. The investors are: Hermes EOS on behalf of its stewardship clients, Legal and General Investment Management (LGIM), Aviva Investors, M&G Investments, Newton Investment Management, HSBC Global Asset Management, the Church Commissioners for England, APG – on behalf of ABP and other pension fund clients – and the Local Authority Pension Fund Forum