Activist seeks AGM votes to get BP to align with Paris

Shareholder activist group Follow This is urging shareholders to compel BP to align one of its key emissions milestones with the Paris climate agreement at the UK major's upcoming annual general meeting on 27 April.

At the forthcoming AGM, Follow This wants BP's shareholders to back a resolution demanding that the company align its existing 2030 reduction aims covering greenhouse gas emissions from the use of its energy products with the goal of the Paris agreement. The 2015 Paris deal calls for global warming to stay "well below" a 2°C rise in pre-industrial temperatures and ideally limit it to a 1.5°C rise.

BP recently raised its 2030 target for oil and gas production, and, as a result, narrowed its end-decade target for reducing scope 3 emissions - those emissions generated when the oil and gas BP produces is used. Instead, of aiming to reduce scope 3 emissions by 35-40pc, the company's new goal is to reduce these by 20-30pc by 2030, against a 2019 baseline.

BP said it does not support the new Follow This resolution because "it is unclear", it encroaches on the board's responsibility for the company's strategy, it is "simplistic", and it is "disruptive".

Follow This argues that BP's scope 3 goal, called 'aim 2', will not lead to large-scale net reductions in absolute emissions by 2030 partly because BP's total scope 3 emissions "are approximately three times as high as the scope 3 emissions covered under aim 2, because BP also sells third-party fossil fuels next to the fossil fuels BP itself extracts".

Oil executives have argued in the past that scope 3 emissions generated from third-party production are not their own companies' responsibility.

Following BP advising that its investors reject the Dutch organisation's climate resolution in its "notice of AGM" document, Follow This founder Mark van Baal said the company's reduced ambitions were a "wake-up call" for institutional investors, asset managers and pensions funds. "It will be up to major shareholders to get the company back on track," Van Baal said in a statement today.

In 2022, the Follow This climate resolution garnered just 15pc of shareholder votes, after receiving 20pc support in 2021.

"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," Van Baal said. "Paris-aligned voting has to regain momentum in 2023."

The Follow This statement follows reports at the weekend that two UK pension funds, USS and Border to Coast, which between them oversee some £130bn ($158bn) of assets, plan to vote against BP and Shell directors unless both companies improve their commitments to tackling carbon emissions.

By Jon Mainwaring

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