Investors revolt against BP’s U-turn over green pledges

Last night, a shareholder revolt against Helge Lind as chairman of BP gained momentum. Five of Britain’s largest pension schemes planned to vote against the re-election of Helge in protest of the company’s easing of its green commitments.

Universities Superannuation Scheme announced its plans to vote against Lund, following the National Employment Savings Trust. Brunel Pension Partnership – a grouping of nine council schemes – also announced that it would vote against him. LGPS Central, Border to Coast and two other umbrella council pension groups are joining them.

BP could face a second revolt next week over the pay of bosses. Glass Lewis, an advisory group, has recommended that investors reject BP’s remuneration reports after only 78,329 was deducted from Bernard Looney’s 10 million PS package for the deaths of 4 workers last year.

Investors are angry that BP decided to lower its emissions targets in February, without consulting shareholders. By announcing early their intentions, they hope to encourage investors who are hesitant to join in the protest.

Diandra SOOBIAH, Nest’s head of responsible investments, said that while it was disappointing to see BP backtrack on its climate pledges, the fact that they didn’t give us shareholders a chance vote on this significant decision is what’s most worrying. This undermines the trust that shareholders have in their board and corporate governance.

Nest is the default pension fund that employers use to automatically enroll their employees in pensions. Nest has more than 11 million members, and over £24 billion in investments, including PS48 millions in BP bonds and shares.

Lund is a 60-year-old Norwegian who formerly led Statoil (now Equinor) and BG Group. He has been chairing BP since 2019. 96.6 percent of shareholders backed him at the annual meeting last year.

The Universities Superannuation scheme said: “We consider the lowering of BP 2030 targets to be a significant development that should have been put up for a vote by investors.” It manages PS89billion of assets, which includes a £34m stake in BP.

Brunel stated that the retreat in February was “a material modification to the plan presented by BP to its shareholders, and a change which seriously undermines BP’s credibilty”.

BP has pledged to achieve net zero emissions in 2050, after reporting record profits last year. At the annual meeting of last year, 88 percent of investors backed its climate plans. These included interim targets of 2030 emission reductions centered around a much-vaunted target of cutting oil and natural gas production by 40 percent this decade.

BP abandoned its target because it said it had to continue investing in oil to meet the demand. It intended to cut production by 25 percent, meaning it would still pump two million barrels a week in 2030.

BP’s reversal of its decision has been criticized by ethical investment groups. These include EOS, the stewardship department of Federated Hermes. EOS co-leads discussions with BP about its energy transition plans for Climate Action 100+. Climate Action 100+ is a group of over 700 investors who manage assets worth more than $68 trillion. Bruce Duguid of Federated said that investors will be concerned by such a significant change in BP’s absolute 2030 emissions reduction target.

BP stated: “The energy transformation is complex.” We are proud of the. . . We continue to engage with all of our stakeholders about this topic. We listened carefully to what our stakeholders had to say before we updated on our strategy. However, we acknowledge that different shareholders and other stakeholder may have a different perspective on the decisions made. “Safety performance is one of the key factors used to determine directors’ annual bonuses.”

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